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

(Mark One)

[ X ]    Annual report under section 13 or 15(d) of the Securities Exchange Act
         of 1934 for the fiscal year ended December 31, 1998

[   ]    Transition report under section 13 or 15(d) of the Securities Exchange
         Act of 1934 for the transition period from              to
                                                    ------------    ------------
Commission File Number:     000-23039

                              ORALABS HOLDING CORP.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

            Colorado                                            14-1623047
  ------------------------------                             -----------------
 (State or other jurisdiction of                             (I.R.S. Employer
  incorporation or organization)                            Identification No.)

 2901 South Tejon Street, Englewood, Colorado                     80110
 --------------------------------------------                     --------
   (Address of principal executive offices)                      (Zip Code)

(Issuer's telephone number:    (303) 783-9499
                               ---------------

Securities to be registered under Section 12(b) of the Act:

    Title of each class               Name of each exchange on which registered
         None
 
Securities to be registered under Section 12(g) of the Act:

                    Common Shares, par value $0.001 per share
                    -----------------------------------------
                                (Title of class)

--------------------------------------------------------------------------------
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing  requirements for the past 90 days.
                               Yes   X   No
                                   -----      -----
Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

State issuer's revenues for its most recent fiscal year:  $7,090,016

As of March  25,  1999,  the  aggregate  market  value of common  stock  held by
non-affiliates of the Registrant, computed by reference to the last trade of the
common stock on that date, was  approximately  $4,512,165.  (Issuers involved in
bankruptcy  proceedings during the past five years) Check whether the issuer has
filed all documents and reports  required to be filed by Section 12, 13 or 15(d)
of the Exchange Act after the  distribution of securities under a plan confirmed
by a court. Yes _______ No _______

(Applicable  only to corporate  registrants)

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date.  As of March 22, 1999,  there were
9,160,755  shares  of  common  stock  outstanding.

Documents incorporated by reference.  Portions of the Company's definitive Proxy
Statement to be mailed to  stockholders in connection with the Annual Meeting of
Stockholders  of the  Company to be held on May 27,  1999 (the "1998  Definitive
Proxy  Statement"),  which will be filed with the  Commission not later than 120
days  after  the end of the  fiscal  year to  which  this  report  relates,  are
incorporated  by  reference  in Part III  hereof.
       Transitional Small Business Disclosure Format (Check one): Yes   No   X
                                                                           -----

<PAGE>


                                     PART I

Item 1.  Description of Business.

     Business  Development.  On May 1, 1997,  OraLabs,  Inc.,  a privately  held
company,  became a wholly-owned subsidiary of SSI Capital Corp. (the predecessor
of the Company).  SSI Capital  Corp.  subsequently  merged with OraLabs  Holding
Corp., with OraLabs Holding Corp. becoming the surviving company. As a result of
these transactions, the Company is the sole stockholder of OraLabs, Inc.

     At the time that  OraLabs,  Inc.  became a subsidiary  of the Company,  the
Company was only engaged in seeking a suitable  business to be the subject of an
acquisition  or merger  transaction.  The  Company  was not then  engaged in any
operating  business  and had not been  engaged in an  operating  business for at
least five (5) years.  The  business in which the Company had been  involved was
totally unrelated to that of the Company's subsidiary.

     The following discussion, insofar as it is for time periods prior to May 1,
1997,  will,  in effect,  be about the business of OraLabs,  Inc.  (which may be
referred to as the "Subsidiary"),  as SSI Capital Corp. was not then engaging in
any  substantive  business.  The term  "Company" or "OraLabs"  will mean OraLabs
Holding Corp., successor to SSI Capital Corp.

     The  Subsidiary  was formed in 1990 for the purposes of  manufacturing  and
distributing tooth-whitening products. The name of the Subsidiary was originally
AmWhite Labs, Incorporated,  which was changed in April 1994 to OraLabs, Inc. In
1992 the Subsidiary's flagship product, Ice Drops(R), a breath drop product sold
in a small plastic bottle, was introduced as an alternative to breath sprays and
candy breath mints.  In 1995 the Company  introduced  its brand of breath sprays
under  the Ice  Drops(R)  name.  This  impulse-priced  product  was  distributed
substantially  under  the  same  distribution  network  established  for the Ice
Drops(R) breath drops. The Subsidiary sought to have both products  displayed at
checkout counters and in convenience stores to be positioned as consumer impulse
purchases.

     In 1996 the  Subsidiary  introduced  a line of lip balms sold in a patented
mini-size package, in furtherance of the Subsidiary's consumer impulse marketing
strategy. In addition, three new SPF-30 sun block lip balms were introduced.  In
1997 OraLabs  introduced its extreme sour drops, which are a line of liquid sour
candy drops packaged in the same small bottle as the  traditional  Ice Drops(R).
The product was developed to capitalize upon what the Subsidiary  believed was a
growing  market for sour,  tart,  hard candies being  purchased by pre-teens and
teenagers.

     In 1997 the Company also  introduced a line of sore throat  sprays and zinc
sprays under the brand name Zinc-7(TM).  The goal of the Company was to create a
line of VitaSpray  brand  products to include a pocket size sore throat spray as
well as spray  vitamins.  The Company ceased  production and  development of the
entire line in 1998.

                                       2

<PAGE>


     In 1998 the  Company  introduced  a line of  nutritional  supplements  with
initial  distribution into General Nutrition  Centers.  Throughout the year, the
product line grew to include  MSM,  Glucosamine+MSM,  5-HTP,  vitamin E oils and
healthybears(TM) (vitaminized gummy bears).

     The Company does business in approximately 25 international markets and the
Company  is  actively  seeking  to expand its  international  distribution.  The
Company is currently  supplying  numerous airlines and hotels with its products,
including a specially packaged  mouthwash,  as part of those businesses' amenity
programs.

     Business of the Company.
     ------------------------

     Principal  Products,  Their Markets and Distribution.  The general business
done by the Company is to produce and sell  consumer  products  relating to oral
care, lip care and nutritional supplements. The Company's products are currently
sold in over  50,000  retail  outlets  in all 50 states as well as in 25 foreign
countries.  The products are sold through  wholesale  distributors as well as by
direct  sale to mass  retailers,  grocery  stores,  convenience  stores and drug
stores.  The principal  products produced by the Company can be categorized into
three groups: breath fresheners, including liquid drops under the brand name Ice
Drops(R),  as well as sour drops; lip balm products under the names Ice Drops(R)
and  Liprageous(R)  as  well  as  under  private  label  names;  and a  line  of
nutritional supplements and related products consisting of MSM, Glucosamine+MSM,
5-HTP, vitamin E oils and healthybears(TM)

     The Company's  strategy for its breath  freshener and lip balm products has
been to develop and sell products which the Company  believes are niche products
that can be  differentiated  from  products of its  competitors.  The  marketing
strategy  includes  capitalizing  on the  distribution  network  that  currently
carries one or more of the  Company's  products,  and building upon the business
relationships  that have  been  established.  With  respect  to the  nutritional
supplements,  the Company's marketing strategy is to identify and market cutting
edge products with broad consumer appeal. The new products will tend to be those
which the Company then expects to soon be more widely known to the public due to
new research, media coverage or other publicity.

     The Company's products and packaging have been conceptualized and developed
in-house. The Company's breath freshener and lip balm products are marketed from
and packaged at the Company's  manufacturing  facility in  Englewood,  Colorado.
Most packaging, filling and automated manufacturing equipment has been designed,
built and  maintained  by the  Company's  own staff.  This allows the Company to
rapidly introduce and manufacture new products,  reducing lengthy lead times and
some of the cost of  capital  expenditures  associated  with  some  new  product
introductions. It also allows the Company to test new products before committing
capital  to  full-scale   manufacturing  endeavors.  To  produce  the  Company's
nutritional  supplements,  the  Company  typically  buys  some or all of the raw
materials and contracts with third parties to produce the final products.

                                       3

<PAGE>


     OraLabs  entered the private label  category in the fourth quarter of 1997.
The Company's  initial  private label  customers  included  Rite-Aid  (including
Thrifty and  Payless)  and Sally's  Beauty  Supply.  The Company  also  produces
products for other  retailers  and  marketing  companies who market the products
under their own brand names.  The Company also does some contract  packaging for
its breath spray products.  These contracts have helped establish the Company as
a private label  manufacturer and helps to provide a platform from which to grow
the private label business.

     Products  Discontinued  in 1998. In 1997, the Company  introduced a line of
sore  throat  sprays  and zinc  sprays  under the  brand  name  Zinc-7(TM).  The
substantial  portion of all of the shipments was to one customer,  and after the
cough and cold season ended in March-April 1998, the Company accepted the return
of most of those sales (see  Management's  Discussion  and  Analysis-Results  of
Operations).  Although  the  Company  determined  that a variety of factors  was
responsible for the poor sales of the products, the Company made the decision to
cease production of that product line.

     In early 1998,  the  Company  tested a proposed  line of spray  vitamins by
conducting focus groups,  test marketing and product  samplings.  As a result of
these  efforts,  the Company  determined  not to proceed with that product line.
However,  in the course of that product  research,  the Company began developing
alternative products to use as an entree into the nutritional supplement market,
as discussed in the next section.

     Products  Launched in 1998.  In 1998,  the Company  began  selling  dietary
supplements  and related  products in the  nutritional  supplement  market.  The
nutritional  supplement  market not only contains  branded and generic  products
such as simple  vitamins and minerals,  but also includes more complex  products
such as combinations  of a wide variety of vitamin,  mineral and herbal products
as well as sports  nutrition and meal  supplements.  The nutritional  supplement
category is large and growing with an estimated  $12.7  billion in sales in 1997
according to the Nutrition  Business  Journal.  The Company  entered this market
with four types of products: MSM,  Glucosamine+MSM,  5-HTP and vitaminized gummy
bears.

     The Company's  encapsulated  products consist of MSM,  Glucosamine+MSM  and
5-HTP. To make these  products,  the Company buys the raw materials and provides
the materials and labels to an  encapsulator  for production and packaging.  The
products are then shipped by the Company. Among other things, MSM is intended to
combat pain associated with allergies,  arthritis and strained muscles or joints
while the  Glucosamine+MSM  aims to further  relieve  symptoms  of joint  pains,
muscle  pains and  arthritis.  These  products are sold through a variety of the
Company's customers.

     The Company's 5-HTP supplements,  which are intended to relieve symptoms of
such  conditions  as insomnia and  headaches,  were  initially  sold to a single
customer. Sales of the product did not meet the Company's expectations, and as a
result the Company has $623,184 worth of inventory of the raw materials for this
product  (see  Management's   Discussion  and   Analysis-Liquidity  and  Capital
Resources).  The Company has not yet  determined  whether to attempt to sell the
raw material to other wholesalers or to remarket the product elsewhere.

                                       4

<PAGE>

     The Company's healthybears(TM) consist of gummy bears fortified with single
vitamins or multiple vitamins, which are sold through a variety of the Company's
distributors,  or are fortified  with minerals  which are currently  sold solely
through  GNC  Nutrition  Centers.  The  Company  purchases  the candy  bears and
contracts out the formulation of the products and the packaging.

     Other Business.  In April 1998,  OraLabs,  Inc. entered into a Contract for
Services with Top Form Brands,  Inc. ("Top Form"), a corporation owned solely by
the Company's  President.  Under the  contract,  OraLabs  provides  warehousing,
shipping and accounting  services for products sold on a wholesale  basis by Top
Form. The Company has the personnel and warehousing capacity necessary to handle
the  services  required by Top Form without an increase in the  Company's  fixed
costs.  The  Company is paid a fixed  price per case of product  warehoused  and
shipped by the Company,  and the Company  believes that the price is fair to the
Company.  Revenue  under the  Contract  consisted of  approximately  7.6% of the
Company's 1998 revenues (see Certain  Relationships and Related  Transactions in
the Company's 1998 Definitive Proxy Statement).

     In 1998,  the Company  licensed  the right to sell a product  known as Sure
Squeeze,  which is a  squeegee-like  device  that  slides onto the end of a tube
(such as a toothpaste tube) to allow all of the toothpaste (or other contents of
the tube) to be dispensed. The product was initially sold to Wal-Mart but now is
also being sold to other retailers.

     Competitive  Business  Conditions.  Competition  for  all of the  Company's
products is very  significant.  With respect to the Company's breath  freshening
products,  direct  competitors who  manufacture  liquid or spray breath products
consist of less than five.  The Company  believes  that its primary  competitive
products are  Binaca(R) and Sweet  Breath(R).  However,  if one considers  candy
breath mints as competition for the same group of products, the Company believes
that there are more than 50 competitors.

     With respect to the Company's lip balm products,  the Company believes that
approximately 70% of the market is controlled by three dominant competitors (who
sell  Chapstick(R),  Blistex(R)  and  Carmex),  and the  balance  of the  market
consists of more than 50 different companies.

     With respect to nutrition  products,  competition  in this industry is very
broad based.  Manufacturers  and marketers  include tiny  start-ups,  major drug
manufacturers  and Fortune 100  companies.  The vast size of the market makes it
possible  for many  niche  marketers  as well as the major  manufacturers  to be
successful, although there appears to be some consolidation within the industry.
The retail  environment is made up of mass retail  customers and the health food
industry retailers.  In addition there are many multi level marketers and direct
sellers supplying nutritional supplements.

          The  Company  has  sought to  anticipate  competition  for its  breath
freshener and lip balm products by the distinguishing  size and packaging of its
products,  as well as by competing with respect to pricing. The Company has been
allowed a utility  patent  and a design  patent  for the  container  for its Ice
Drops(R)  brand lip balms.  The Company  believes that for some of its products,
its smaller size and lower price than that of its competitors is an advantage to
the  Company.  However,  other  factors  such as a  competitor's  greater  brand
recognition or preferable product placement of a competitor's products at retail
locations  may nullify or reduce  whatever  competitive  advantage the Company's
products have.

                                       5

<PAGE>


          Sources and Availability of Raw Materials. In general, the sources and
availability  of  materials  used by the  Company  in its  business  are  fairly
widespread,  and the Company believes that it could obtain secondary  sources of
raw materials to the extent that an existing business  relationship  terminates.

     Dependence  Upon a Single  Customer.  The Company does not believe that its
business with respect to any  particular  product or products is dependent  upon
any single customer.

          Patents, Trademarks,  Licenses,  Franchises and Concessions.  Although
there can be no assurance of proprietary  protection  respecting pending patents
and  trademarks  held  by the  Company  (see,  "Cautionary  Statement  Regarding
Forward-Looking  Statements,  No  Assurance  of  Proprietary  Protection"),  and
although  the  Company  intends to  vigorously  seek to enforce  and protect its
proprietary  rights,  the  Company  does not  believe  that the loss of any such
proprietary  right  would in and of itself,  adversely  affect the  Company in a
material manner.

          Seasonality.  The demand for the Company's lip balm products  tends to
increase during the cold weather  months,  but the inclusion of sunblock in some
of the lip balm products may tend to even out sales during the year.

          Practices  of the  Company  in the  Industry.  The  Company's  typical
practices  with respect to all of its products is to keep adequate  inventory on
hand for shipments within a two to three week period,  and the Company generally
extends  credit on purchases for a term of 30 days after  shipment.  The Company
does not formally provide a right of customers to return  merchandise.  However,
the  Company  believes  that it is a common  practice in the  industry,  and the
Company  subscribes  to such  practice  on a  case-by-case  basis,  to  permit a
retailer who has not sold all of the goods it has purchased  within a reasonable
time, to ask the Company to accept a return of the unsold merchandise.

          Government  Regulation.  The Company's  breath  freshener and lip balm
products are not subject to burdensome  governmental  regulation (see Cautionary
Statement  on  Governmental   Regulation  below).  However,  the  manufacturing,
packaging,  labeling,  advertising,  distribution  and  sale  of  the  Company's
nutritional  supplements  are subject to regulation by one or more  governmental
agencies, the most active of which is the Food and Drug Administration  ("FDA"),
which  regulates  those products under the Federal Food,  Drug, and Cosmetic Act
("FDCA") and regulations promulgated thereunder. These products are also subject
to  regulation  by the Federal Trade  Commission  ("FTC") ,the Consumer  Product
Safety Commission ("CPSC"), the United States Department of Agriculture ("USDA")
and the Environmental  Protection Agency ("EPA").  The Company's  activities are
also  regulated  by various  agencies  of the  states,  localities  and  foreign
countries  to which  the  Company  distributes  its  products  and in which  the
Company's  products  are sold.  The FDCA has been  amended  several  times  with


                                       6

<PAGE>

respect to dietary  supplements,  most  recently by the  Nutrition  Labeling and
Education Act of 1990 ("NLEA";) and the Dietary  Supplement Health and Education
Act of 1994 ("DSHEA").

     The  DSHEA  provides  certain  regulatory   benefits  for  the  nutritional
supplement industry.  Prior to its passage, some supplements had been classified
as food additives  which could subject them to a review process by the FDA prior
to approval for sale. Now,  products  defined as dietary  supplements  under the
DSHEA  are  regulated  similarly  to  food,  so much of the  special  regulatory
clearance is eliminated.  In addition, claims about how a supplement affects the
structure or function of the body may be made  (although any statement made must
also state that the product is not intended to diagnose,  treat, cure or prevent
any disease).

     The FTC, which exercises  jurisdiction  over the advertising of nutritional
and dietary  supplements under the Federal Trade Commission Act, has in the past
several  years  instituted   enforcement  actions  against  several  nutritional
supplement  companies  alleging  false and  misleading  advertising  of  certain
products. These enforcement actions have resulted in the payment of fines and/or
consent  decrees by certain of the  companies  involved.  The FTC  continues  to
monitor  advertising  with respect to nutritional and dietary  supplements.  The
Company has not been the subject of any FTC inquiries or actions.

          Research  and  Development  Expenses.  The Company has not  expended a
material amount of its resources on research and development activities.

          Costs and Expenses of Compliance With Environmental  Laws. The Company
does not have any material amount of cost related to  environmental  regulations
and the Company does not expect to incur  material  expenses for that purpose in
fiscal year 1999.

          Number of Employees.  The approximate number of employees hired by the
Company as of the end of fiscal year 1998 was 80.

Item 2.  Description of Property.

     The Company's  headquarters are located in an office-warehouse  building of
approximately  16,000  square feet  located in  Englewood,  Colorado,  which the
Company leases from the Company's President. The property includes the executive
offices of the Company, as well as the Company's manufacturing  facilities and a
portion of its warehouse  facilities.  The Company's  lease expires in September
2000, and the Company  believes that its rental rate is comparable to that which
would be  charged  by an  unaffiliated  landlord.  The  Company  also  leases an
additional  approximate  18,000  square  feet of  warehouse  space in a building
located near the Company's  headquarters,  which is leased from an entity solely
owned by the Company's President. The lease expires in June 2003, and the


                                       7

<PAGE>

Company  believes  that its rental  rate is  comparable  to that which  would be
charged by an unaffiliated  landlord.  (See "Certain  Relationships  and Related
Transactions" incorporated by reference to the 1998 Definitive Proxy Statement.)

     The  Company  does  not  believe  that it  would  be  difficult  to  locate
comparable  space  for its  business  operations  at such  time as either of the
leases expires.

Item 3.  Legal Proceedings.

     On January 22, 1999, a proceeding  was commenced in the District  Court for
Arapahoe  County,  Colorado by Bryan Simmons against the Company,  its operating
subsidiary and the Company's President. The suit arises from Mr. Simmons' former
status as an independent  contractor  and, later, an employee of OraLabs Inc. In
the lawsuit Mr. Simmons claims  commissions based upon sales of certain products
of the  Company  and he also  appears to assert  claims for  finder's  fees with
respect to transactions that have not occurred. The Company has filed its answer
with respect to some of the claims, has filed counterclaims  against Mr. Simmons
and has moved to dismiss  some of the  claims.  The  Company  believes  that the
claims are without merit,  that the likelihood of an unfavorable  outcome to the
Company is small, and the Company intends to contest the case vigorously.

     Except for that lawsuit, the Company is not a party to any material pending
legal  proceedings  to which either it or its  subsidiary is a party or of which
any of its property is subject.

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

     No matter  was  submitted  during the  fourth  quarter  of the fiscal  year
covered by this report to a vote of security holders.


                                       8


<PAGE>



                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

     (a) (i) Market Price of and  Dividends on the Company's  Common Stock.  For
many years prior to closing the  transaction  by which the Company  acquired its
wholly-owned subsidiary,  OraLabs, Inc., there was no established public trading
market for the Company's  common stock.  Approximately  in September  1997,  the
common stock of the Company began to be traded on the OTC Bulletin Board.  Since
April 28,  1998,  the  common  stock of the  Company  has  traded on the  NASDAQ
SmallCap Market under the symbol OLAB.

     The following sets forth the range of high and low bid  information for the
Company's  common  stock for the third and fourth  quarters of fiscal year 1997.
The source of such  information for the third and fourth quarters of fiscal year
1997 and for January 1998 through  April 27, 1998 (the last day the stock traded
on the OTC Bulletin  Board) is an OTC Bulletin  Board  Quarterly  Quote  Summary
prepared  by  NASDAQ  Trading  and  Market  Services,  while  the  source of the
information for the balance of 1998 is as reported by NASDAQ.

                                     Reported High Bid        Reported Low Bid
                                     -----------------        ----------------

Third quarter, fiscal 1997                 $3.00                     $2.50
Fourth quarter, fiscal 1997                $4.50                     $2.75
First quarter, fiscal 1998                 $4.75                     $4.125
Second quarter, fiscal 1998                $4.875                    $4.25
Third quarter, fiscal 1998                 $4.688                    $2.00
Fourth quarter, fiscal 1998                $3.50                     $1.25

The  quotations  reflect  inter-dealer  prices,  without  adjustment  for retail
mark-up,  mark-down  or  commission  and  may  not  necessarily  present  actual
transactions.

          (ii) Recent Sales of Unregistered Securities. Pursuant to the terms of
a Consulting  Compensation  Agreement  with an  independent  party,  the Company
issued  16,664  shares of common  stock to that party in  consideration  for its
consulting  services.  The  shares  were  issued in equal  monthly  installments
commencing  in  September  1998.  The  balance of 8,336  shares of common  stock
issuable  under the  Agreement  were issued to the  consultant  during the first
quarter of fiscal  year 1999.  The  issuance  of the shares was exempt  from the
registration  requirements of the Securities Act of 1933, as amended (the "Act")
pursuant to Section 4(2)  thereof,  and the  certificates  for the issued shares
contain the legend denominating the shares as "restricted  securities" under the
Act.

          In  June  1998,  the  Company  issued  5,000  options  to  each of two
non-employee  members  of the  board  of  directors  of the  Company  under  the
Company's 1997 Non-Employee Directors' Option Plan. The transactions were exempt
from the registration requirements of the Act pursuant to Sections 4(6) and 4(2)
of the Act.  The options vest in four equal  installments  over a period of four
years, with each option having an exercise price of $4.25 per share.

                                       9

<PAGE>


          (b) As of March 3, 1999, there were  approximately  928 record holders
of the common stock of the Company.

          (c) The Company has not paid any cash dividends and it is not intended
that any cash dividends will be paid in the foreseeable future.

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

Results of Operations. For the period ending December 31, 1998 as compared with
the period ending December 31, 1997.
--------------------------------------------------------------------------------

Product sales decreased  approximately $209,000 or 3%. The Company's returns and
allowances increased  approximately $299,000. The Company recorded approximately
$690,000 in returns and allowances for 1998,  substantially  from cough and cold
product  returns.  The Company does not  anticipate  any material cough and cold
returns in 1999 and customers who returned the products have remained  customers
of the Company through purchases of the Company's lip care and oral care product
lines.

 Services income increased  approximately  $537,000.  In April 1998, the Company
entered  into a  management  agreement  with a  company  owned by the  Company's
president. The Company receives a fee for providing certain receiving,  shipping
and  accounting  services.  Revenue is  recognized  as product  is  shipped.  At
December 31, 1998,  the Company  recognized  revenue of  approximately  $537,000
under this agreement.

Gross profit decreased  approximately  $270,000.  Excluding services income from
revenue, the gross profit from product sales decreased  approximately  $806,000,
or from 52% to 41% of product sales. Gross profits are down considerably for the
Company's products that are packaged on blister cards (i.e.,  "carded sales")due
to downward pressure on selling prices caused by competition. Specifically, 1998
carded - sales of $1,053,273  yielded a gross profit of $262,752 or 25%,  versus
1997  carded-sales(excluding  cough and cold products,  which were substantially
returned) of $1,403,804 which yielded a gross profit of $576,478 or 41%.

Additionally, profit margins decreased due to increased overhead costs. Overhead
costs absorbed in 1998 were up  approximately  $200,000 which was distributed to
the various product lines. The increase was a result of adding  additional rent,
utilities and other costs associated with adding additional warehouse space.

General  and  administrative  expenses  increased  approximately  $269,000.  The
Company's  administrative  salaries increased  approximately  $139,000, of which
approximately  $94,000 was to the President  under the employment  agreement and
the balance of approximately  $45,000 was predominantly for additional staffing.
Consulting increased approximately $37,000, with dimished consulting anticipated
for 1999. Research and development  increased  approximately  $42,000 due to the
VitaSpray  line that the  Company  investigated  but  decided  against  selling.
Depreciation  increased  $34,186  due to  fixed  asset  additions  of  $303,614.
Property insurance increased $14,235 due to the additional  building,  increased
inventory and equipment.

Other expenses  decreased  $263,656.  $340,000 was recorded for stock issued for
services  in 1997,  while in 1998 stock  issued for  services  was  $42,702  and
miscellaneous expenses attributable to being a public company was $33,642. Stock
issued for services in 1997 was to two employees of the Company's subsidiary for
services in the amount of $340,000 and is a  non-recurring  item. The employees'
services were in the areas of human resources and investor relations,  which the
Company  was  required  to address as part of  preparing  for its entry into the
public marketplace.

Net income decreased by $309,094 as explained by the above activities.

                                       10

<PAGE>


Liquidity and Capital Resources.
--------------------------------
Balance Sheet as of December 31, 1998 Compared to December 31, 1997.

Cash  decreased  approximately  $675,000  substantially  as a net  effect of the
following activities.

Accounts  receivable  increased  approximately  $439,000.  One  of  our  largest
customers  had our  account  on hold in the  amount  of  $261,000  for  computer
processing  errors that have been resolved in 1999, and two new Company accounts
established in the last quarter of 1998 were given extended terms.

Inventory  increased  approximately  $1,363,000  due primarily to an increase in
nutritional supplements ($870,000);  sore throat sprays ($180,000);  and work in
process for orders ($139,000). The supplements had some anticipated large orders
that did not occur.  Management expects to sell this inventory through a renewed
sales  effort.  The sore  throat  sprays  were from  returns and will be sold or
disposed  of by the end of 1999.  The work in  process  was all for orders to be
shipped.

Accounts payable increased approximately $551,000, substantially due to customer
credits  booked to accounts  payable  (for  returns of cough and cold  products)
against  future  sales.  Of the  $551,000,  the three  accounts with the largest
credits as of December 31, 1998 were approximately $393,000, $28,000 and $24,000
respectively.

Trends.  In 1998,  the Company  broadened  its product  base through its line of
nutritional  supplements  and broadened  its lip care product line.  The Company
intends to  continue to expand its range of products so that it will become less
reliant on any individual product.

We expect continued growth for international sales, with current distribution to
25 countries  reflected in sales for 1998 of  $1,087,622 as compared to $909,588
for 1997, an approximate  20% increase.  Our oral care and lip care products are
the only products currently sold  internationally.  Domestically,  we anticipate
growth  in 1999 to be  dominated  by the lip  care and  nutritional  supplements
product  lines while  maintaining  no more than  modest  growth in our oral care
product  lines  due to  competitive  pressures.  The oral care  product  line is
holding ground in the breath  freshener  products while we anticipate  continued
growth  with our sour  drops  products.  The lip care has been  enhanced  by the
addition of our  Liprageous(R)  brand,  which has already been  accepted by such
large store chains as Kmart and Rite Aid.

The nutritional supplements,  with sales of $497,986 in 1998, look to see growth
through an increased  array of products with increased  exposure from exhibiting
at key  trade  shows  and  with  sales  staffing  specific  to  the  nutritional
supplement category.

Impact of Inflation.
--------------------
The Company's financial condition has not been affected by
the modest inflation of the recent past. The Company believes that revenues will
not be materially  affected by  inflation.  The Company's lip care and oral care
products  are  primarily  very low cost,  impulse  items  (under  $0.99 cents to
consumers) and the nutritional  supplements are a small part (7% of revenues) in
a category that is on a growth trend.

                                       11

<PAGE>


Year 2000.
----------
Many computer  systems were written using two digits rather than four
to define the applicable  year. As a result,  those computer  programs have time
sensitive  software  that  recognizes  a date using "00" as the year 1900 rather
than the year 2000. This could cause a system failure or miscalculations causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices,  or engage in similar normal  business
activities.

The Company utilizes software vendors for its computer program applications. The
installation  of a year  2000  compliant  version  of the  Company's  financial,
inventory,  and production  software was completed  during the fourth quarter of
1998.  The Company has also  completed an  assessment  of its internal  personal
computer  network,  which is  expected to be year 2000  compliant  by the end of
April 1999. Updating  telephones,  facsimile machines and labeling equipment for
year 2000 was completed during the fourth quarter of 1998. The voice mail system
is scheduled to be year 2000 compliant by the end of April 1999.

The Company does not believe that the cost of becoming year 2000  compliant will
be material to the financial  condition of the Company.  To date the Company has
incurred  minor  expenses,  primarily  for  assessment  of the year 2000  issue,
development  of a  modification  plan,  and  the  installation  of a  year  2000
compliant version of its financial, inventory, and production software.

The cost of the  project  and the dates on which the  Company  believes  it will
complete the year 2000  modifications  are based on management's best estimates.
However,  there can be no  guarantee  that  these  estimates  will be  achieved.
Failure  to be year 2000  compliant  in a timely  fashion  could have a material
adverse effect on the Company's operations and financial condition.

Our suppliers and  customers who could  adversely  effect our business have been
surveyed for Year 2000 compliance.  All of our material  business  partners have
stated that either they have or will achieve Year 2000  compliance.  The Company
has not  determined  the extent to which the  Company  may be  impacted by third
parties' systems,  which may not be year 2000 compliant.  Accordingly,  the year
2000 computer issue may create risk for the Company from third parties with whom
the Company deals. There can be no assurance that the systems of other companies
with whom the  Company  deals  with will be timely  converted,  or that any such
failure to convert by another  company  could not have an adverse  effect on the
Company.  The Company intends during the second fiscal quarter to resurvey those
suppliers  and customers  who had  previously  advised us that they were not yet
year 2000 compliant,  and the Company will then determine if a contingency  plan
needs to be formulated.
                                       12

<PAGE>


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:

     The provisions of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act") provide companies with a "safe harbor" when making forward-looking
statements.  This "safe  harbor"  encourages  companies  to provide  prospective
information about their companies without fear of litigation. The Company wishes
to take  advantage of this "safe  harbor" and is  including  this section in its
Annual  Report on Form  10-KSB in order to do so.  All  statements  in this Form
10-KSB that are not historical facts,  including without  limitation  statements
about  management's  expectations  for any period  beyond the fiscal  year ended
December 31, 1998, are forward-looking  statements and involve various risks and
uncertainties,  many of which are beyond the control of the Company, and any one
of which, or a combination of which, could materially reflect the results of the
Company's operations and whether forward-looking  statements made by the Company
ultimately prove to be accurate.

     The following  discussion  outlines certain risk factors that in the future
could  affect the  Company's  results and cause them to differ  materially  from
those  that may be set  forth  in any  forward-looking  statement  made by or on
behalf of the Company. The Company cautions the reader,  however, that this list
of risk  factors  and  others  discussed  elsewhere  in this  report  may not be
exhaustive.

     Competition.  The  businesses  in which the  Company is engaged  are highly
competitive  and are  engaged  in to a  large  extent  by  companies  which  are
substantially larger and have significantly  greater resources than the Company.
Although  the Company  believes  that its Ice  Drops(R)  brand of liquid  breath
freshener drops has achieved some measure of name recognition, to a large extent
the Company  does not have the capital  resources,  marketing  and  distribution
networks,  manufacturing  facilities,  personnel,  product name  recognition  or
advertising budget of the larger companies.  The industries in which the Company
competes  experience  consolidations  of  competitors  from time to time and the
Company's business could be adversely affected by such activities.  There can be
no  assurance  that the  Company  will be able to  compete  successfully  in the
future.

                                       13

<PAGE>


     Unproven  Markets for Certain of the Company's  Products.  The Company only
began selling its  nutritional  supplement  products  recently.  The nutritional
supplement  industry  is  influenced  by  products  that  become  popular due to
changing  consumer tastes and media  attention.  While the Company believes that
there  is a  market  for  its  products,  it has no  prior  history  with  these
supplements  and therefore  cannot be assured that the products will be accepted
or  competitive in the  marketplace in the long term, or that if accepted,  that
part of the Company's business will be profitable.

          Product  Liability  Insurance.  Because the Company  manufactures  and
sells certain products designed to be ingested, it faces the risk that materials
used for the final products may be  contaminated  with substances that may cause
sickness or other  injury to persons who have used the  products.  Although  the
Company maintains standards designed to prevent such events, certain portions of
the  process of  product  development,  including  the  production,  harvesting,
storage  and   transportation  of  raw  materials,   along  with  the  handling,
transportation and storage of finished products delivered to consumers,  are not
within the control of the  Company.  Furthermore,  sickness or injury to persons
may occur if products  manufactured by the Company are ingested in dosages which
exceed the dosage recommended on the product label or are otherwise misused. The
Company  cannot  control  misuse of its products by consumers or the  marketing,
distribution  and  resale of its  products  by its  customers.  With  respect to
product  liability  claims in the United States,  the Company has $1 million per
occurrence  and $2 million in aggregate  liability  insurance.  In addition,  if
claims  should  exceed $2 million,  the Company  has excess  umbrella  liability
insurance of up to an additional $1 million.  However, there can be no assurance
that such  insurance  will  continue to be available,  or if available,  will be
adequate to cover potential  liabilities.  The Company generally does not obtain
contractual  indemnification  from parties  supplying raw materials or marketing
its products and, in any event, any such indemnification is limited by its terms
and, as a practical matter, to the creditworthiness of the indemnifying party.

     Dependence on Key Personnel.  The Company's future success depends in large
part on the continued service of its key personnel.  In particular,  the loss of
the services of Gary Schlatter, its President and Chief Executive Officer, could
have a material  adverse effect on the operations of the Company.  The Company's
subsidiary has an employment agreement with Mr. Schlatter which expires on April
30, 2000. The Company's future success and growth also depends on its ability to
continue to attract,  motivate and retain highly qualified employees.  There can
be no assurance that the Company will be able to do so.

     Government   Regulation.   The  manufacturing,   processing,   formulation,
packaging,  labeling  and  advertising  of some of the  Company's  products  are
subject to  regulation  by one or more federal  agencies and under  various laws
(see  Description  of  Business-Government  Regulation  above).  There can be no
assurance that the scope of such  regulations will not change or otherwise cause
an increase in the expenses and  resources of the Company  which must be applied
to complying with such regulations.  As an example,  the Company's sun-block lip
balms are  considered a "drug" by the FDA. If the FDA were to conclude  that any
of the  Company's  products  determined  to be a  "drug"  violate  FDA  rules or
regulations,  the FDA may seek to  restrict  or remove  such  products  from the
market.  Such  action may be taken  against  the  Company  and any entity  which

                                       14

<PAGE>

manufactures  products for the Company.  As an additional  example,  regulations
concerning good manufacturing  practices with respect to nutritional supplements
could have an adverse impact upon the cost or methods of producing the products.

     The Company's  business is also regulated by various agencies of the states
and  localities  in which  the  Company's  products  are  sold and  governmental
regulations in foreign countries where the Company sells or may seek to commence
sales. Such regulations could prevent or delay entry into a market or prevent or
delay  the  introduction  of  Company  products.  For  example,  the  growth  of
international  sales is expected to be slowed by the long process of registering
new products.

     The Company may be subject to additional  laws or regulations  administered
by the FDA or other federal, state or foreign regulatory authorities, the repeal
or amendment of laws or regulations or more stringent interpretations of current
laws or regulations,  from time to time in the future.  The Company is unable to
predict  the  nature  of  such  future  laws,  regulations,  interpretations  or
applications, nor can it predict what effect additional governmental regulations
or administrative orders, when and if promulgated, would have on its business in
the future. They could,  however,  require  reformulation of certain products to
meet new standards,  recall or discontinuance of certain products not able to be
reformulated,  imposition of additional  record keeping  requirements,  expanded
documentation  of the  properties  of certain  products,  expanded or  different
labeling and scientific substantiation.  Any or all such requirements could have
a material  adverse effect on the Company's  results of operations and financial
condition.

     Managing  Growth.  The Company  experienced a period of significant  growth
during fiscal years ended December 31, 1997 and 1996. Significant growth did not
occur in fiscal year 1998,  but it could occur again the future,  especially  if
the Company acquires one or more other companies with revenues  comparable to or
greater than those of the Company. Such growth has placed, and could continue to
place,  a strain on the  Company's  management,  customer  service  and  support
operations,   sales  and  administrative  personnel  and  other  resources.  The
Company's  ability to manage  continued growth may require the Company to expand
its operating,  management,  information and financial systems, all of which may
increase its operating expenses or otherwise strain the Company's resources.  If
the Company is  unsuccessful  in managing  growth,  if such growth should occur,
there could be a material adverse effect on the Company.  In addition,  the loss
of a  significant  number of customers,  or a significant  reduction in purchase
volume by or financial difficulty of such customers,  for any reason, could have
a material adverse effect on the Company. Successful management of growth, if it
occurs,  will require the Company to improve its financial  controls,  operating
procedures and management information systems, and to train, motivate and manage
its employees.

     Dependence  Upon  Significant   Distributors  and  Retailers.  No  customer
accounted  for more than ten percent (10%) of the  Company's  gross  revenues in
1998.  The  Company  had over  1,200  purchasing  customers  in fiscal  1998 and
believes  that the  loss of  revenues  from  any  customer  could  gradually  be
replaced,  but there could be adverse effects upon the Company's  business until
those revenues are replaced.

                                       15

<PAGE>


     Dependence  Upon  Third  Party  Suppliers.  With  respect  to  some  of the
Company's products, the product itself is formulated and supplied to the Company
by third party vendors, and the Company then packages the products for sale. For
other  products,  the Company  provides  some or all of the raw  materials and a
third party  completes  preparation of the product and/or its packaging.  Should
these  relationships  terminate,  or should these parties be otherwise unable to
perform their  obligations  on terms  satisfactory  to the Company,  the Company
would be required to establish  relationships with substitute parties.  Although
the Company believes that it can do so, there can be no assurance that this will
be the case,  in which case there  could be a material  adverse  effect upon the
Company.

     No Assurance of  Proprietary  Protection.  The Company has been allowed two
patents.  The Company also holds several domestic and international  trade marks
and has several applications pending. Certain aspects of the Company's business,
although  not  the  subject  of  patents,  include  formulations  and  processes
considered to be proprietary in nature.  There can be no assurance that any such
"proprietary"  information  will  not be  appropriated  or  that  the  Company's
competitors  will not  independently  develop  products  that are  substantially
equivalent or superior to the Company's.  Even if the pending patents are issued
to the  Company,  there can be no  assurance  that the Company  would be able to
successfully  defend its  patents or  trademarks  against  claims from or use by
competitors,  and there can be no  assurance  that the  Company  will be able to
obtain patent or trademark protection for any new products.  In addition, in the
event that any of the  Company's  products are  determined  to infringe upon the
patents or proprietary rights of others, the Company could be required to modify
its products or obtain licenses for the manufacture or sale of the products,  or
could be prohibited from selling the products.

     No Assurance of  Scientific  Proof.  The Company's  nutritional  supplement
products are intended to provide relief of certain  symptoms or to otherwise aid
in the health of the  consumers.  If  scientific  data were to conclude that the
products do not do so, or if for any other reason the  Company's  products  were
not viewed by the public as providing any meaningful  benefit,  there could be a
material adverse effect upon the sales of the products.

Item 7. Financial Statements.

     Financial  Statements meeting the requirements  specified in Item 7 of Form
10-KSB follow the signature page and are listed in Item 13 of this Annual Report
on Form 10-KSB.

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

     Effective  December 29, 1998,  the firm of Ehrhardt Keefe Steiner & Hottman
P.C. was retained as the Company's  independent  auditors and the firm of former
auditors,  Schumacher & Associates,  Inc. was dismissed. In addition, on May 12,
1997,  shortly  after the time of the  completion of the merger  transaction  by
which OraLabs, Inc. (the Company's subsidiary) became a wholly-owned  subsidiary

                                       16

<PAGE>

of SSI Capital Corp. (the predecessor of the Company),  the auditors retained by
SSI Capital Corp.  were  dismissed  and replaced  with  Schumacher & Associates,
Inc.,  which had then been the  independent  auditors for OraLabs,  Inc. In both
cases,  the firm of auditors  being  dismissed have not rendered a report on the
Company's financial  statements which contained an adverse opinion or disclaimer
of opinion,  or was  modified as to  uncertainty,  audit  scope,  or  accounting
principles,  and there were no disagreements  between the Company and its former
accountant  on any  matter of  accounting  principles  or  practices,  financial
statement  disclosure or auditing scope or procedure.  These  transactions  were
previously reported on Forms 8-K filed on January 4, 1999 and May 14, 1997.

                                    PART III

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

     The  following  table  identifies  each  of  the  Company's  directors  and
executive  officers,  indicating the principal  occupation or employment of each
such person and the name and  principal  business of any  organization  by which
such person is so employed:

<TABLE>
<CAPTION>

      Name of                      Director or              Principal Occupation             Name and Business
    Individual                  Executive Officer               or Employment                   of Employer
    ----------                  -----------------               -------------                   -----------
<S>                         <C>                             <C>                              <C>
Gary H. Schlatter           Director and Executive         President of Company's           OraLabs, Inc.
                               Officer                        Subsidiary
Suzan M. Schlatter          Director                       Secretary of Company's           OraLabs, Inc.
                                                              Subsidiary
Allen R. Goldstone          Director                       Consultant                       Creative Business
                                                                                               Strategies, Inc.;
                                                                                               Business
Consulting
                                                                                               Firm
Michael I. Friess           Director                       Attorney                         Michael Friess
Emile Jordan                Executive Officer              Comptroller of Company's         OraLabs, Inc.
                                                              Subsidiary
</TABLE>

     The  balance  of the  information  required  for this Item is  incorporated
herein by reference to the 1998 Definitive Proxy Statement.

Item 10.  Executive Compensation.

     The information  required for this item is incorporated herein by reference
to the 1998 Definitive Proxy Statement.

                                       17

<PAGE>


Item 11.  Security Ownership of Certain Beneficial Owners and Management.

         The  information  required  for this  item is  incorporated  herein  by
reference to the 1998 Definitive Proxy Statement.

Item 12.  Certain Relationships and Related Transactions.

         The  information  required  for this  item is  incorporated  herein  by
reference to the 1998 Definitive Proxy Statement.

                                       18

<PAGE>


                                     PART IV

Item 13.  Exhibits and Reports on Form 8-K.

     (a)  The  following  documents  are  filed  as a part  of  this  Form  10-K
immediately following the signature pages:

    1.  Consolidated Financial Statements (OraLabs Holding Corp. and
        Consolidated Subsidiaries):
                  Independent Auditor's Report

                  Consolidated Balance Sheet - December  31, 1998

                  Consolidated Statements of Operations for
                  the  years  ended   December  31,  1998  and
                  December 31, 1997

                  Consolidated  Statement of Stockholders' Equity
                  from December 31, 1996 through December 31, 1998

                  Consolidated  Statements  of Cash  Flows for
                  the years ended  December  31, 1998 and 1997

                  Notes to Consolidated  Financial  Statements
 

    2.  Exhibits required to be filed are listed below:
                  Certain of the following exhibits are hereby
                  incorporated  by reference  pursuant to Rule
                  12(b)-32 as promulgated under the Securities
                  and Exchange Act of 1934,  as amended,  from
                  the reports noted below:

                                       19

<PAGE>
<TABLE>
<CAPTION>


      Exhibit
        No.          Description
      -------        -----------

      <S>           <C>
      3.1(i)(1)      Articles of Incorporation
     3.1(ii)(2)      Amended and Restated Bylaws
     3.1(ii)(5)      Second Amended and Restated Bylaws
        4(2)         Specimen Certificate for Common Stock
       10.1(2)       1997 Stock Plan
       10.2(2)       1997 Non-Employee Directors' Option Plan
       10.3(3)       Amended and Restated Employment Agreement Between the Company's
                     Subsidiary and Gary Schlatter
       10.4(2)       Initial Stock Option Grant to Michael Friess under 1997 Non-Employee
                     Directors' Option Plan
     10.5(i)(2)      Lease Agreement Between the Company's Subsidiary and Gary Schlatter
                     (September 1, 1995)
     10.5(ii(5)      Business Lease Between the Company and 2780 South Raritan, LLC,
                     (July 1, 1998)
       10.6(2)       Sublease Agreement Between the Company's Subsidiary and Modern
                     Plastics, Inc.
       10.7(2)       Employment Agreement Between the Company's Subsidiary and Allen R.
                     Goldstone, with accompanying termination agreement
       10.8(2)       Employment Agreement Between the Company's Subsidiary and Sanford
                     Schwartz, with accompanying termination agreement
       10.9(4)       Merger Agreement and Plan of Reorganization Between the Company's
                     Subsidiary, SSI Capital Corp., Oralmerge, Inc., et al.
      10.10(5)       Contract for Services effective April 1, 1998 between OraLabs, Inc. and
                     Top Form Brands, Inc.
        11           No statement re: computation of per share earnings is required since such
                     computation can be clearly determined from the material contained in this
                     Annual Report on Form 10-KSB.
        21(2)        List of Subsidiaries of the Company
       23.1(5)       Consent of Independent Public Accountants (Ehrhardt Keefe Steiner & Hottman P.C.)
       23.2(5)       Consent of Independent Public Accountants (Schumacher & Associates, Inc.)
       27(5)         Financial Data Schedule for OraLabs Holding Corp. and Consolidated
                     Subsidiaries
 
</TABLE>

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

1    Incorporated herein by reference to Exhibit C of the Definitive Information
     Statement  filed by the Company's  predecessor,  SSI Capital Corp., on July
     24, 1997.
2    Incorporated  herein by  reference  to the  Company's  Form 10-K  filed for
     fiscal year 1997.
3    Incorporated  herein by reference to Exhibit B of the Form 8-K filed by the
     Company's  predecessor,  SSI Capital Corp., on May 14, 1997.
4    Incorporated  herein by reference to Exhibit A of the Form 8-K filed by the
     Company's predecessor, SSI Capital Corp., on May 14, 1997.
5    Filed herewith.

     (b) A Form 8-K was filed in January 1999 for the reporting date of December
29, 1998,  respecting the dismissal of the Company's former independent auditors
and the  retention of the firm of Ehrhardt  Keefe  Steiner & Hottman P.C. as the
Company's independent auditors.

                                       20
<PAGE>


                                   SIGNATURES


     In accordance  with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                 ORALABS HOLDING CORP.



                                 By:      /s/ Gary H. Schlatter
                                          --------------------------------------
                                          Gary H. Schlatter, President


                                 By:      /s/ Emile Jordan
                                          --------------------------------------
                                          Emile Jordan, Chief Financial Officer
Date:    March 31, 1999


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated.

       Signature                         Title                      Date
       ---------                         -----                      ----

 /s/ Gary H. Schlatter           Director, President,          March 31, 1999
-------------------------       Chief Executive Officer
   Gary H. Schlatter
 

 /s/ Allen R. Goldstone                Director                March 31, 1999
-------------------------
  Allen R. Goldstone


/s/ Suzan M. Schlatter                 Director                March 31, 1999
-------------------------
  Suzan M. Schlatter



                                       21

<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES


                                Table of Contents
                                -----------------

                                                                          Page
                                                                          ----

Independent Auditors' Report..............................................F - 1

Independent Auditors' Report .............................................F - 2

Consolidated Financial Statements

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

         Consolidated Statements of Operations............................F - 4

         Consolidated Statement of Stockholders' Equity...................F - 5

         Consolidated Statements of Cash Flows............................F - 6

Notes to Consolidated Financial Statements................................F - 7







<PAGE>
                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
Oralabs Holding Corp. and Subsidiaries
Denver, Colorado


We have audited the accompanying  consolidated  balance sheet of Oralabs Holding
Corp. and  Subsidiaries  as of December 31, 1998,  and the related  consolidated
statements  of  income,  stockholders'  equity  and cash flows for the year then
ended.  These  consolidated  financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting  principles used and significant
estimates  made by management,  as well as evaluating  the overall  consolidated
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Oralabs  Holding
Corp.  and  Subsidiaries  as of  December  31,  1998  and the  results  of their
operations  and their cash flows for the year then  ended,  in  conformity  with
generally accepted accounting principles.




                                      /s/  Ehrhardt Keefe Steiner & Hottman PC
                                           Ehrhardt Keefe Steiner & Hottman PC

February 24, 1999
Denver, Colorado

                                      F-1
<PAGE>


                REORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                -------------------------------------------------

The Board of Directors
Oralabs Holding Corp.

We have audited the consolidated  statements of income, changes in stockholders'
equity and cash flows of Oralabs Holding Corp. and Consolidated Subsidiaries for
the  year  ended  December  31,  1997.   These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform an audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit inclludes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  results  of  operations,  changes  in
stockholders'  equity and cash flows of Oralabs  Holding Corp. and  Consolidated
Subsidiaries  for the year ended December 31, 1997 in conformity  with generally
accepted accounting principles.

                                            /s/  Schumacher & Associates, Inc.
                                            ------------------------------------
                                            Schumacher & Associates, Inc.
                                            Certified Public Accountants
                                            12835 E. Arapahoe Road
                                            Tower II, Suite 110
                                            Englewood, CO 80112


February 24, 1998

                                     F - 2
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES
 
                           Consolidated Balance Sheet
                                December 31, 1998


                                     Assets
Current assets
   Cash and cash equivalents                                        $  348,979
   Accounts receivable, net of
    allowance for doubtful accounts
    of $33,007                                                       1,125,425
   Inventory (Note 2)                                                1,962,137
   Deferred income taxes (Note 10)                                      58,060
   Prepaid expenses                                                    125,242
                                                                    ----------
     Total current assets                                            3,619,843

Property and equipment at cost, net (Note 3)                           431,403
                                                                    ----------

Total assets                                                        $4,051,246
                                                                    ==========

                      Liabilities and Stockholders' Equity
Current liabilities
   Accounts payable                                                 $  858,866
   Accrued liabilities                                                 197,190
   Income taxes payable (Note 10)                                      106,294
                                                                    ----------
     Total current liabilities                                       1,162,350

Deferred tax liability (Note 10)                                        17,941
                                                                    ----------
     Total liabilities                                               1,180,291
                                                                    ----------

Commitments and contingencies (Notes 4, 5, 8 and 13)

Stockholders' equity (Note 9)
   Preferred stock, $.001 par value,
     1,000,000 shares authorized;
     none issued and outstanding                                          --
    Common stock, $.001 par value;
    100,000,000 shares authorized;
    9,142,419 issued and outstanding                                     9,142
   Additional paid-in capital                                        1,179,309
   Retained earnings                                                 1,682,504
                                                                    ----------
     Total stockholders' equity                                      2,870,955
                                                                    ----------
Total liabilities and stockholders' equity                          $4,051,246
                                                                    ==========

                See notes to consolidated financial statements.

                                     F - 3
<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                      Consolidated Statements of Operations


                                                             December 31,
                                                     --------------------------
                                                         1998          1997
                                                     -----------    -----------
Revenue
   Product sales                                     $ 6,553,331    $ 6,762,361
   Services income (Note 4)                              536,685           --
   Cost of sales                                       3,853,959      3,256,794
                                                     -----------    -----------
     Gross profit                                      3,236,057      3,505,567
                                                     -----------    -----------

Operating expenses
   Engineering                                           110,286        101,022
   Selling and marketing                                 848,419        788,294
   General and administrative                            929,713        660,654
   Other                                                  76,344        340,000
                                                     -----------    -----------
     Total operating expenses                          1,964,762      1,889,970
                                                     -----------    -----------

Net operating income                                   1,271,295      1,615,597

Other income (expense)
   Interest and other income                              41,080         34,750
                                                     -----------    -----------
     Total other income (expense)                         41,080         34,750
                                                     -----------    -----------

Net income before provision for income taxes           1,312,375      1,650,347

Provision for income taxes (Note 10)
   Current                                               473,211        483,180
   Deferred                                               20,605        (67,816)
   Pro forma                                                --          107,330
                                                     -----------    -----------
                                                         493,816        522,694
                                                     -----------    -----------

Net income (pro forma for 1997)                      $   818,559    $ 1,127,653
                                                     ===========    ===========

Basic income per common share
 (pro forma for 1997)                                $       .09    $       .13
                                                     ===========    ===========

Weighted average shares outstanding
 (pro forma for 1997)                                  9,126,621      8,707,362
                                                     ===========    ===========

Diluted income per share
 (pro forma for 1997)                                $       .09    $       .12
                                                     ===========    ===========

Diluted weighted average shares
 outstanding (pro forma for 1997)
                                                       9,486,436      9,064,353
                                                     ===========    ===========

                See notes to consolidated financial statements.

                                     F - 4
<PAGE>
<TABLE>
<CAPTION>
                                               ORALABS HOLDING CORP. AND SUBSIDIARIES
 
                                           Consolidated Statement of Stockholders' Equity
                                          From December 31, 1996 through December 31, 1998

 
                                       Preferred Stock             Common Stock          Additional
                                     -------------------        --------------------       Paid-in        Retained
                                     Shares       Amount          Shares      Amount       Capital
Earnings         Total
                                     -------     -------        ---------    -------     -----------
------------    -----------

<S>                                  <C>        <C>            <C>          <C>         <C>
<C>             <C>
Balance December 31, 1996                 -      $     -        7,458,784    $ 7,459     $   137,457    $
622,688    $   767,604

Reorganization/additional
 paid-in capital                          -            -          999,771      1,000         160,849
-         161,849

Common stock issued for cash              -            -          325,000        325         324,675
-         325,000

Reclassification of undistributed
 S Corporation earnings                   -            -               -          -          171,786
(171,786)            -

Common stock issued for
 services                                 -            -          340,000        340         339,660
-         340,000

Distributions                             -            -               -          -               -
(714,610)      (714,160)

Net income                                -            -               -          -               -
1,127,653      1,127,653
                                       -----     --------     -----------    -------     -----------
------------    -----------

Balance at December 31, 1997              -            -        9,123,555      9,124       1,134,427
863,945      2,007,496

Common stock options
 exercised                                -            -            2,200          2           2,198
-           2,200

Common stock issued
 for services                             -            -           16,664         16          42,684
-          42,700

Net income                                -            -               -          -               -
818,559        818,559
                                       -----     --------     -----------    -------     -----------
------------    -----------

Balance at December 31, 1998              -      $     -        9,142,419    $ 9,142     $ 1,179,309    $
1,682,504    $ 2,870,955
                                       =====     ========     ===========    =======     ===========
============    ===========

                                        See notes to consolidated financial statements.

                                                              F - 5
</TABLE>

<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES
 
                      Consolidated Statements of Cash Flows

                                                            December 31,
                                                     --------------------------
                                                         1998           1997
                                                     -----------    -----------
Cash flows from operating activities
   Net income                                        $   818,559    $ 1,127,653
                                                     -----------    -----------
   Adjustments to reconcile net income
    to net cash (used in) provided by
    operating activities
   Depreciation                                           86,943         52,757
   Deferred taxes                                         27,697           --
   Stock issued for services                              42,700        340,000
   Changes in assets and liabilities
    Accounts payable                                     550,941        183,666
    Accrued expenses                                     (51,750)      (294,199)
    Accounts receivable                                 (438,757)        51,770
    Inventory                                         (1,362,867)          --
    Income taxes payable                                 (13,292)      (148,286)
    Other current assets                                 (33,379)       (72,634)
                                                     -----------    -----------
                                                      (1,191,764)       113,074
                                                     -----------    -----------
       Net cash (used in) provided by
        operating activities                            (373,205)     1,240,727
                                                     -----------    -----------

Cash flows from investing activities
   Investment in property and equipment                 (303,614)      (109,767)
                                                     -----------    -----------
       Net cash (used in) investing activities          (303,614)      (109,767)
                                                     -----------    -----------

Cash flows from financing activities
   Stock issued and additional paid-in capital             2,200        486,849
   Distributions                                            --         (714,610)
                                                     -----------    -----------
       Net cash (used in) financing activities             2,200       (227,761)
                                                     -----------    -----------

Net increase (decrease) in cash
 and cash equivalents                                   (674,619)       903,199

Cash and cash equivalents, beginning of period         1,023,598        120,399
                                                     -----------    -----------

Cash and cash equivalents, end of period             $   348,979    $ 1,023,598
                                                     ===========    ===========

Supplemental disclosures of
 cash flow information:
         Cash paid for income taxes
           was $346,695 (1998) and
           $470,924 (1997)



                 See notes to consolidated financial statements

                                      F - 6
<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
 


Note 1 - Organization and Summary of Significant Accounting Policies
--------------------------------------------------------------------

Oralabs Holding Corp.  (the "Company") a Colorado  corporation was formed during
June 1997. SSI Capital Corp.  (SSI) a New York  Corporation was  incorporated on
January 30, 1981. Effective August 22, 1997, SSI was merged into the Company and
the  outstanding  shares of SSI were converted to shares of the Company on a one
for two  basis.  All  references  to  common  stock in the  Company's  financial
statements have been  retroactively  adjusted for the merger and the one for two
reduction in shares outstanding.

Oralabs,  Inc. (ORALABS),  a Colorado corporation was incorporated on August 10,
1990.  ORALABS is in the business of  manufacturing  and  distributing lip balm,
fresh breath and other  products.  ORALABS is a wholly owned  subsidiary  of the
Company.

Principles of Consolidation
---------------------------

The consolidated  financial  statements  include the accounts of ORALABS and the
accounts of SSI since the date of the reverse acquisition and the accounts of OL
Sub Corp. (an inactive  entity) since inception.  All intercompany  accounts and
transactions have been eliminated.

Cash and Cash Equivalents
-------------------------

For  purposes  of the  statements  of cash  flows,  the  Company  considers  all
short-term  securities  purchased  with an original  maturity of three months or
less to be cash equivalents.

Advertising Costs
-----------------

The Company expenses advertising  expenses as incurred.  Total advertising costs
of $77,120 and  $68,709  for  December  31,  1998 and 1997,  respectively,  were
expensed to operations.

Inventories
-----------

Inventories consist of raw materials,  work in process, and finished goods which
are carried at the lower of average  cost or market  value.  Cost is  determined
using the average cost method.

Research and Development
------------------------

Research  and  development  costs  related to new product  lines are expensed as
incurred.  Total  research  and  development  costs of $53,472  and  $11,378 for
December 31, 1998 and 1997, respectively were expensed to operations.

                                     F - 7
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
 

Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Property and Equipment
----------------------

Property and  equipment is stated at cost.  Depreciation  is provided  using the
straight-line  method for  financial  reporting  purposes  at rates based on the
following estimated useful lives:

                                                        Years
                                                        -----

      Machinery and equipment                            5-7
      Leasehold improvements                              5

Revenue Recognition
-------------------

The Company recognized revenue in accordance with the criteria set forth in SFAS
48. Revenue is recognized as product is shipped net of estimated returns.

Income Taxes
------------

Prior to completion of the business  combination,  the Company had elected to be
taxed under  Subchapter S of the Internal Revenue Service Code. The election was
automatically terminated effective May 1, 1997. The 1997 statement of operations
reflect  pro  forma  information  which  present  pro forma  income  taxes as if
computed at the statutory rate.

The Company  calculates  and records the amount of taxes  payable or  refundable
currently or in future years for temporary  differences between the consolidated
financial  statement basis and income tax basis based on the current enacted tax
laws. Temporary  differences are differences between the tax basis of assets and
liabilities and their reported amounts in the consolidated  financial statements
that will result in taxable or deductible amounts in future years.

Use of Estimates
----------------

The  preparation  of  consolidated   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 consolidated
financial  statements and the reporting  amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Stock-Based Compensation
------------------------

The  Company  has  elected to account  for  stock-based  compensation  using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees,"  and  related  interpretations.
Accordingly,  compensation cost for stock options in the accompanying statements
of operations is measured as the excess, if any, of the fair market value of the
Company's stock at the measurement date over the amount the employee must pay to
acquire the stock.

                                     F - 8
<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Recently Issued Accounting Pronouncements
-----------------------------------------

In September 1997, the FASB issued Statement of Financial  Accounting  Standards
No.  130,  "Reporting   Comprehensive  Income"  (SFAS  130),  which  establishes
standards for reporting and display of comprehensive  income, its components and
accumulated balances.  Comprehensive income is defined to include all changes in
equity except those resulting from  investments by owners and  distributions  to
owners.  Among  other  disclosures,  SFAS 130  requires  that all items that are
required to be recognized  under current  accounting  standards as components of
comprehensive  income,  be reported in a financial  statement  that is displayed
with the same prominence as other financial statements.  Currently the Company's
only component,  which would comprise  comprehensive  income,  is its results of
operations.

Also, in June 1997, the FASB issued Statement of Financial  Accounting Standards
No. 131,  "Disclosures about Segments of an Enterprise and Related  Information"
(SFAS 131), which supersedes Statement of Financial Accounting Standards No. 14,
"Financial   Reporting  for  Segments  of  a  Business   Enterprise."  SFAS  131
establishes standards for the way that public companies report information about
operating  segments in annual  financial  statements  and requires  reporting of
selected  information about operating  segments in interim financial  statements
issued to the public.  It also establishes  standards for disclosures  regarding
products and services,  geographic areas and major  customers.  SFAS 131 defines
operating  segments as components of a company  about which  separate  financial
information  is  available  that is evaluated  regularly by the chief  operating
decision  maker  in  deciding  how  to  allocate   resources  and  in  assessing
performance.

SFAS  No.'s 130 and 131 are  effective  for  financial  statements  for  periods
beginning  after  December 15, 1997,  and require  comparative  information  for
earlier periods to be restated.

In February of 1998, the FASB issued Statement of Financial Accounting Standards
No.  132,  "Employers'  Disclosures  about  Pensions  and  Other  Postretirement
Benefits" (SFAS No. 132),  which supercedes SFAS No.'s 87, 88, and 106. SFAS No.
132 addresses  disclosure only and is effective for fiscal years beginning after
December 15, 1997. Restatement of disclosures for prior periods is required. The
adoption of SFAS No. 132 will have no current impact on the Company's  financial
statements,  as no  prior  disclosures  under  SFAS  No.  87,  88,  or 106  were
applicable.

In June of 1998, the FASB issued Statement of Financial Accounting Standards No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities"(SFAS  No.
133).  SFAS  No.  133  addresses  the  accounting  for  derivative  instruments,
including  certain  derivative  instruments  embedded  in other  contracts,  and
hedging  activities.  SFAS No. 133 is effective  for all fiscal  quarters of all
fiscal years beginning after June 15,1999.  Initial  application of SFAS No. 133
shall be as of the  beginning  of an  entity's  fiscal  quarter,  on that  date,
hedging  relationships  shall  be  designated  anew  and  documented  under  the
provisions  of this  statement.  The  adoption  of SFAS  No.  133  shall  not be
retroactively  applied.  This statement currently has no impact on the financial
statements  of  the  Company,  as the  Company  does  not  hold  any  derivative
instruments or participate in any hedging activities.

                                     F - 9
<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Earnings Per Share
------------------

The  Company  computes  earnings  per  share in  accordance  with  Statement  of
Financial  Accounting  Standard  No. 128.  Basic  earnings per share is computed
based on the  weighted  average  number of common  shares  outstanding.  Diluted
earnings per share is computed  based on the weighted  average  number of common
shares plus potential  dilutive common shares  outstanding  which include common
stock options granted under the Company's stock option plans.

Reclassifications
-----------------

Certain items in the 1997 financial  statements have been  reclassified with the
1998 presentation.

Concentration of Business and Credit Risk
-----------------------------------------

The Company is engaged primarily in the manufacture and sale of lip balm, breath
and other products throughout North America and  Internationally.  The potential
for severe  financial  impact  can  result  from  negative  effects of  economic
conditions within the market or geographic area. Since the Company's business is
principally  in  one  area,  this  concentration  of  operations  results  in an
associated risk and uncertainty.  Since the Company's  products are inexpensive,
the potential  negative  effect of changes in economic  conditions are less than
would be expected for higher priced products of other industries.

Financial  instruments that potentially subject the Company to concentrations of
credit risk consist  principally  of  temporary  cash  investments  and accounts
receivable.   As  of  December  31,  1998,   the  Company  had  no   significant
concentrations of credit risk, other than the Company had $304,642 invested in a
money market fund.  While the underlying  investment  securities of the fund are
guaranteed by the U.S. government, the shares of the fund are not guaranteed and
therefore are considered to be a concentration of credit risk. (See Note 6)


Note 2 - Inventories
--------------------

Inventories consisted of the following:
                                                           December 31,
                                                               1998
                                                         ----------------

         Raw materials                                   $      1,668,550
         Work-in-process and finished goods                       293,587
                                                         ----------------

                                                         $      1,962,137
                                                         ================


                                     F - 10
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 3 - Property and Equipment
-------------------------------

Property and equipment consisted of the following:
                                                          December 31,
                                                             1998
                                                        ----------------
Machinery and equipment                                 $        577,292
Leasehold improvements                                           111,545
                                                        ----------------
                                                                 688,837
         Less accumulated depreciation                          (257,434)

                                                        $        431,403
                                                        ================


Note 4 - Transaction with Related Party
---------------------------------------

The Company leases office and warehouse space owned by the Company's president.

In April 1998, Oralabs Holding Corp. entered into a management  agreement with a
company  owned by Oralabs  Holding  Corp.'s  president.  Oralabs  Holding  Corp.
receives  a  fee  for  providing  certain  receiving,  shipping  and  accounting
services.  Revenue is  recognized  as product is shipped.  At December 31, 1998,
Oralabs  Holding Corp.  recognized  revenue of $536,685 under this agreement and
amount due from the related party was $27,664.


Note 5 - Operating Lease
------------------------

The Company leases office and manufacturing  facilities under separate operating
leases for buildings owned by the Company's  president.  The Company also leases
two vehicles under operating lease agreements. Total rent payments on all leases
totals approximately $15,359 per month.

             Year Ending December 31,                        Amount
             ------------------------                        ------

                     1999                                $      178,944
                     2000                                       155,156
                     2001                                       111,156
                     2002                                       102,039
                     2003                                        49,500
                                                         --------------

                                                         $      596,795
                                                         ==============

Rent expense under these  operating  leases totaled  $122,652 and $73,153 during
the years ended December 31, 1998 and 1997, respectively.

                                     F - 11
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 6 - Significant Customers and Suppliers
--------------------------------------------

For the year ended  December 31, 1998, the Company had purchases of $675,000 and
$571,066 from two suppliers  accounting for 18% and 15% of total purchases.  The
Company had accounts  receivable  of $261,176 and  $115,604  from two  customers
representing  23% and 10% of accounts  receivable  at  December  31,  1998.  The
Company  had one  customer  that  accounted  for 13% or  $879,107 of gross sales
during the year ended December 31, 1997.


Note 7 - Line-of-Credit
-----------------------

The Company entered into a line-of-credit agreement with a bank in the amount of
$750,000  which  expires May 1999.  As of  December  31,  1998,  the Company had
available the entire $750,000 unused  line-of-credit.  The initial interest rate
was 7.5% per annum to be  adjusted  periodically  based on 1.0%  under the banks
index rate. The  line-of-credit  is collateralized by a first lien on all of the
Company's business assets.


Note 8 - Business Combination
-----------------------------

Effective May 1, 1997, SSI and ORALABS completed a business  combination whereby
ORALABS  became  a  wholly-owned  subsidiary  of  SSI.  Prior  to  the  business
combination,  SSI had 874,771 shares of common stock outstanding.  An additional
125,000  shares  were  issued  to the two  largest  shareholders  of SSI and one
additional individual upon closing the business  combination.  Effective January
1,  1997  ORALABS  issued  shares of its  common  stock to two  individuals  for
services which were exchanged for 340,000 shares of SSI on May 1, 1997.  Also on
May 1, 1997,  7,458,784  shares of SSI were issued for the ownership of ORALABS.
As a result of these transactions,  ORALABS became a wholly-owned  subsidiary of
SSI. Since the former  controlling  shareholders of ORALABS owned  approximately
85% of SSI after the business  combination,  the  transaction has been accounted
for as a reverse acquisition.  The net monetary assets of SSI at the time of the
reverse  acquisition  of  approximately  $161,849  have  been  accounted  for as
issuance of stock and additional paid-in capital.


Note 9 - Stock Options
----------------------

In 1997, the Company adopted an incentive stock option plan for employees. Under
this plan, the board approved a program to grant certain  employees the right to
purchase common stock of the Company for $1.00 per share. The options vest on an
annual basis. As of December 31, 1998, the Company had 497,800 incentive options
outstanding under this plan, each with exercise price of $1.00 per share.

                                     F - 12
<PAGE>



                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 9 - Stock Options (continued)
----------------------------------

In September  1997, the Company adopted a Non-Employee  Directors'  Option Plan.
The Board  approved a program to grant  certain  directors the right to purchase
common stock of the Company. The options vest on an annual basis. As of December
31, 1998, the Company had 30,000 options  outstanding  under this plan, of which
20,000  options may be  exercised at the price of $1.00 per share and 10,000 may
be exercised at the price of $4.25 per share.  During 1998,  10,000 options were
granted by the Company.

The following is a summary of options and warrants granted:

                                                                 Exercise Price
                                                    Options        Per Share
                                                    -------      --------------
Outstanding December 31, 1997                       520,000      $        1.00
     Options granted                                 10,000               4.25
     Options exercised                               (2,200)              1.00
                                                    -------      -------------

Outstanding December 31, 1998                       527,800      $ 1.00 - 4.25
                                                    =======      =============

The Company has the following stock options and warrants outstanding at December
31, 1998:

                                                         Non-
     Options       Exercise         Expiration        Exercisable   Exercisable
   Outstanding      Price              Date            Options        Options
   -----------      -----         --------------      -----------   -----------

     20,000       $  1.00         September 2002         15,000          5,000
     10,000          4.25            June 2003           10,000             -
    186,000          1.00           April 2007           62,000        124,000
     51,000          1.00            June 2007           40,800         10,200
    260,800          1.00           August 2007         210,400         50,400
  ---------       -------                             ---------     ----------

    527,800                                             338,200        189,600
  =========                                           =========     ==========

Weighted average
 information     $   1.06          99.0 months
                 ========

                                     F - 13

<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 9 - Stock Options (continued)
----------------------------------

The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting  Standards  No.  123,  "Accounting  for  Stock-Based   Compensation".
Accordingly,  no  compensation  cost has been  recognized  using the fair  value
approach for stock options and warrants  granted pursuant to employee plans. Had
compensation  cost for the Company's  stock options and warrants been determined
based on the fair value at the grant date for awards in 1997 and 1998 consistent
with the provisions of SFAS No. 123, the Company's net earnings and earnings per
share would have been reduced to the pro forma amounts indicated below:

                                                        Years Ended
                                                        December 31,
                                                 ---------------------------
                                                  1998               1997
                                                 -------           ---------
Net income - as reported                         818,559           1,127,653
Net income - pro forma                           796,469           1,026,204
Earnings per share - as reported                     .09                 .13
Earnings per share - pro forma                       .08                 .12

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used for grants:  dividend yield and expected  volatility of 62% and
0%;  discount rate of 5.45% and 5.5%; and expected lives of 4 years for 1998 and
1997, respectively.


Note 10 - Income Taxes
----------------------

Deferred  tax  liabilities  and assets are  determined  based on the  difference
between the financial  statement assets and liabilities and tax basis assets and
liabilities  using the tax rates in effect for the year in which the differences
occur. The measurement of deferred tax assets is reduced,  if necessary,  by the
amount of any tax benefits that based on available evidence, are not expected to
be realized.

The components of the provision for income tax expense are as follows:

                                                     December 31,
                                           --------------------------------
                                              1998                 1997
                                           -----------          -----------
     Current                               $   473,211          $   590,510
     Deferred                                   20,605              (67,816)
                                           -----------          -----------

                                           $   493,816          $   522,694
                                           ===========          ===========


                                     F - 14
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 10 - Income Taxes (continued)
----------------------------------

The deferred income tax assets and liabilities  result  primarily from differing
depreciation and amortization periods of certain assets,  provision for doubtful
accounts,  provision for product returns and allowances,  and the recognition of
certain expenses for financial statement purposes and not for tax purposes.

The net current and  long-term  deferred  tax  liabilities  in the  accompanying
balance sheet include the following items:

                                                             December 31,
                                                                1998
                                                          ----------------

     Current deferred tax asset                           $         58,060
     Current deferred tax liability                                      -
                                                          ----------------

                                                          $         58,060
                                                          ================

     Long-term deferred tax asset                         $              -
     Long-term deferred tax liability                               17,941
                                                          ----------------

                                                          $         17,941
                                                          ================

Rate Reconciliation
-------------------

The reconciliation of income tax expense by applying the Federal Statutory rates
to the Company's effective income tax rate is as follows:

                                                        December 31,
                                              -------------------------------
                                                 1998                 1997
                                              ----------           ----------

Federal statutory rate                              34.0%                34.0%
State tax on income, net of federal
 income tax benefit                                  5.0                  5.0
Nondeductible expenses                                .4                   .2
Other - deferred                                    (1.8)                (7.5)
                                              ----------           ----------

                                                    37.6%                31.7%
                                              ==========           ==========

Prior to completion of the business  combination,  the Company had elected to be
taxed  under  Subchapter  S of the  Internal  Revenue  Code.  The  election  was
automatically  terminated  effective May 1997 and as a result,  no provision for
income tax was recorded prior to May 1, 1997.

                                     F - 15
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


Note 11 - Earnings Per Share

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted earnings per share (EPS) computations:
<TABLE>
<CAPTION>


                                                          For the Year Ended December 31, 1998
                                                          ------------------------------------
                                                    Income               Shares             Per-Share
                                                  (Numerator)          (Denominator)
                                                  -----------          -------------

<S>                                               <C>                  <C>                 <C>
Net income                                        $   818,559

Basic EPS
   Weighted average beginning
   shares outstanding                                        -           9,123,555
   Weighted average option shares issued                     -                 669
   Weighted average shares issued for services
                                                             -               2,397
                                                 -------------         -----------
   Income available to common stockholders             818,559           9,126,621            $   .09
                                                                                              =======

Effect of Dilutive Common Stock
   Options                                                                 359,815

Diluted EPS
   Income available to common stockholders plus
    assumed conversions                          $     818,559           9,486,436            $   .09
                                                 =============         ===========            =======

</TABLE>

Note 12 - Export Sales
----------------------

All of the Company's  business is transacted in U.S. dollars and the Company had
no foreign currency  translation  adjustments.  Export sales for the years ended
December  31,  1998 and 1997  were  $1,087,622  and  $909,588  or 17% and 14% of
product sales, respectively.

Note 13 - Contingencies
-----------------------

Litigation
----------

     There is a lawsuit  against the Company which, in the opinion of management
and  supported by advice from counsel,  will not result in any material  adverse
effect on the financial position of the Company.


                                     F - 16


<PAGE>
<TABLE>
<CAPTION>


      Exhibit
        No.          Description
      -------        -----------

      <S>           <C>
      3.1(i)(1)      Articles of Incorporation
     3.1(ii)(2)      Amended and Restated Bylaws
     3.1(ii)(5)      Second Amended and Restated Bylaws
        4(2)         Specimen Certificate for Common Stock
       10.1(2)       1997 Stock Plan
       10.2(2)       1997 Non-Employee Directors' Option Plan
       10.3(3)       Amended and Restated Employment Agreement Between the Company's
                     Subsidiary and Gary Schlatter
       10.4(2)       Initial Stock Option Grant to Michael Friess under 1997 Non-Employee
                     Directors' Option Plan
     10.5(i)(2)      Lease Agreement Between the Company's Subsidiary and Gary Schlatter
                     (September 1, 1995)
     10.5(ii(5)      Business Lease Between the Company and 2780 South Raritan, LLC,
                     (July 1, 1998)
       10.6(2)       Sublease Agreement Between the Company's Subsidiary and Modern
                     Plastics, Inc.
       10.7(2)       Employment Agreement Between the Company's Subsidiary and Allen R.
                     Goldstone, with accompanying termination agreement
       10.8(2)       Employment Agreement Between the Company's Subsidiary and Sanford
                     Schwartz, with accompanying termination agreement
       10.9(4)       Merger Agreement and Plan of Reorganization Between the Company's
                     Subsidiary, SSI Capital Corp., Oralmerge, Inc., et al.
      10.10(5)       Contract for Services effective April 1, 1998 between OraLabs, Inc. and
                     Top Form Brands, Inc.
        11           No statement re: computation of per share earnings is required since such
                     computation can be clearly determined from the material contained in this
                     Annual Report on Form 10-KSB.
        21(2)        List of Subsidiaries of the Company
       23.1(5)       Consent of Independent Public Accountants (Ehrhardt Keefe Steiner & Hottman P.C.)
       23.2(5)       Consent of Independent Public Accountants (Schumacher & Associates, Inc.)
       27            Financial Data Schedule for OraLabs Holding Corp. and Consolidated
                     Subsidiaries
 
</TABLE>

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

1    Incorporated herein by reference to Exhibit C of the Definitive Information
     Statement  filed by the Company's  predecessor,  SSI Capital Corp., on July
     24, 1997.
2    Incorporated  herein by  reference  to the  Company's  Form 10-K  filed for
     fiscal year 1997.
3    Incorporated  herein by reference to Exhibit B of the Form 8-K filed by the
     Company's  predecessor,  SSI Capital Corp., on May 14, 1997.
4    Incorporated  herein by reference to Exhibit A of the Form 8-K filed by the
     Company's  predecessor,  SSI  Capital  Corp.,  on May  14,  1997.
5    Filed herewith.

     (b) A Form 8-K was filed in January 1999 for the reporting date of December
29, 1998,  respecting the dismissal of the Company's former independent auditors
and the  retention of the firm of Ehrhardt  Keefe  Steiner & Hottman P.C. as the
Company's independent auditors.