SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-K
(Mark One)
|X|     Annual report pursuant to section 13 or 15(d) of the Securities Exchange
        Act of 1934 for the fiscal year ended  December 31, 1997 or
                                               -----------------

|_|     Transition report pursuant to 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.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

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


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


(Registrant's telephone number, including area code) (303) 783-9499
                                                      -------------

 Securities registered pursuant to Section 12(b) of the Act:
       Title of each class            Name of each exchange on which registered
               None
----------------------------------    ------------------------------------------

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

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

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

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

As of March 20,  1998,  9,123,555  shares of the  Company's  Common  Stock  were
outstanding   and  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 $6,399,990.

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 Registrant to be held on May 29, 1998 (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.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (ss.  229.405 of this chapter) is not contained  herein,  and
will not 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-K or any amendment to this Form 10-K.  |X|


<PAGE>



                                     PART I

Item 1.  Business.

     Background. On May 1, 1997, OraLabs, Inc., a privately held company, became
a wholly-owned subsidiary of SSI Capital Corp. (the predecessor of the Company).
The name of the Company was changed from SSI Capital  Corp.  to OraLabs  Holding
Corp.  soon  thereafter.  As a result  of these  transactions,  which  have been
previously reported upon by the Company,  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.

     General  Development of Business.  The Subsidiary was formed in 1990 by its
current CEO and President,  for the purposes of  manufacturing  and distributing
its  tooth-whitening  products under the brand name of Amazing White, as well as
under the names of private label brands.  The private label brands were sold via
infomercials  on television,  and eventually  those brands and the Amazing White
brand began to be distributed through retail outlets.

     The name of the Subsidiary was originally AmWhite Labs, Incorporated, which
was changed in April 1994 to OraLabs,  Inc., after the sale of the Amazing White
product line. In 1992 the OraLabs 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  low-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 patent
pending 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




                                        2

<PAGE>


throat sprays and zinc sprays under the brand name  Zinc-7(TM).  The goal of the
Company was to create a pocket size sore throat spray that could be carried with
the consumer all day long, as opposed to  relatively  bulky,  larger  containers
that were on the market. The zinc spray was introduced as an alternative to zinc
lozenges,  which became  popular in recent years as a possible way to reduce the
duration of the common cold.

     In 1998 the  Company  begins its  distribution  of  VitaSpray  brand  spray
vitamins.  The  product  line is  intended  to  include  both  adult  and  child
multi-vitamin spray as well as other vitamin  sprays.  The strategy behind these
products is to provide  convenience for taking vitamins as well as to provide an
alternative for those people who are adverse to swallowing pills.

     The  Company's  marketing  strategy  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 of nearly 50,000 retail stores that currently carry one or
more of the Company's  products,  and building  upon the business  relationships
that have been established.

     All of the Company's  products and packaging have been  conceptualized  and
developed in-house. The Company's products are all packaged at its 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.

     OraLabs recently entered the private label category.  The Company's initial
private  label  contracts  include lip balm  products  for  Rite-Aid  (including
Thrifty and  Payless),  and Sally's  Beauty  Supply.  The Company also does some
contract  packaging for its breath spray  products.  These contracts have helped
establish the Company as a private label  manufacturer,  which gives it an entry
with these customers to pursue other accounts.

     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.

     Narrative Description of Business.
     ----------------------------------

          Principal Products and Their Markets.  As discussed above, the general
business done by the Company is to produce and sell consumer  products  relating
to health,  beauty care and  vitamins.  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



                                        3

<PAGE>



Company can be categorized into four groups: breath fresheners, including liquid
drops  under  the  brand  name Ice  Drops(R),  as well as sour  drops;  lip balm
products under the name Ice Drops(R) as well as under private label names;  cold
and cough products,  including sore throat sprays and zinc sprays; and a line of
vitamin sprays to be introduced under the name VitaSpray.

          The  following  table  sets  forth for each of the last  three  fiscal
years,  the  percentage of total revenue (in excess of 15%)  contributed  by the
three groups of products then sold by the Company.

                          Approximate        Approximate           Approximate
                         Percentage of      Percentage of         Percentage of
                           Company's          Company's             Company's
     Product Group       1997 Revenues      1996 Revenues         1995 Revenues
     -------------       -------------      -------------         -------------

  Breath Fresheners           57%                82%                  100%
  Lip Balm                    28%                18%                   --
  Cough and Cold              15%                --                    --

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

          Status of New Product. Of the above list of products, the only product
in the preliminary  stages is the line of spray vitamins which is in the process
of  being  introduced  for  sale in the  second  quarter  of  fiscal  1998.  All
anticipated  expenses  of  introducing  the  new  line  of  products,  including
advertising budgets,  have not yet been completed by the Company. It is possible
that the  introduction  of this product line could  require the  investment of a
material amount of the assets of the Company. However, the Company believes that
its expenditures could be gradually increased if and when sales increase, rather
than the Company being required to expend substantially all of its investment in
advance of shipping the products.

          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.
However,  at this stage the Company is  purchasing  all of its raw materials for
the  line  of  spray  vitamins  from  a  single  supplier.  In  the  event  that
relationship were to terminate,  the Company would be required to obtain another
supplier in order to continue  the  production  of its spray  vitamins,  and the
Company does not believe that alternate suppliers are readily available.

          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



                                        4

<PAGE>


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 Company believes that its sore throat spray and zinc
spray, as well as its vitamin-C spray in the process of  introduction,  all fall
into the cough and cold category of consumer products. The Company believes that
cough  and cold  products  as well as  moisturizing  lip balms  typically  enjoy
greater sales from September through February of each 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.

          Dependence Upon a Single  Customer.  The Company does not believe that
its  business  with  respect  to any  particular  product or  products  would be
eliminated  by the loss of any one of its  customers.  However,  the Company did
sell to one customer,  Rite-Aid  Corporation,  an amount comprising in excess of
10% of fiscal 1997 revenues.  The Company had over 1,500 purchasing customers in
fiscal  1997 and  believes  that the  loss of a  customer,  even one as large as
Rite-Aid, would gradually be replaced.

          Backlog  Orders.   As  of  December  31,  1997,  the  Company  carried
approximately  $470,000 of orders with future ship dates.  Orders are not booked
as sales until product is shipped.  The Company has no reason to expect that any
orders with future ship dates will not be fulfilled.

          Government Contracts. Not applicable.

          Competitive 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  competitors  for those
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 80% 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 the  Company's
cough and cold related products, the Company's market share is insignificant and
there is a large number of strong competitors. Sales of vitamin products is also
highly  competitive but the Company does not believe that any single  competitor
totally dominates the market.



                                        5

<PAGE>



          The Company has sought to anticipate competition by the distinguishing
size and  packaging of its  products,  as well as by  competing  with respect to
pricing.  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 at retail  locations  with respect to competitive
products may nullify or reduce  whatever  competitive  advantage  the  Company's
products have.

          Research  and  Development  Expenses.  The Company has not  expended a
material  amount  of its  resources  on  research  and  development  activities.
However,  as noted  above,  a  material  amount of the  Company's  assets may be
expended  in  connection  with the  introduction  of the  Company's  new line of
vitamin products.

          Costsand 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 1998.

          Number of Employees.  The approximate number of employees hired by the
Company as of the end of fiscal year 1997 was 65.

     Item 2. Properties.

          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 the year 2000, and the Company  believes that its rental rate is
     comparable to that which would be charged by an unaffiliated landlord.

          The Company also subleases an additional approximate 6,000 square feet
     of warehouse space from an unaffiliated landlord in a building located near
     the Company's headquarters. The sublease expires in 1999.

          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.

          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.



                                        6

<PAGE>



                                    PART II.

     Item 5.  Market for Registrant's 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.
     Commencing approximately in September 1997, the common stock of the Company
     began to be traded on the OTC Bulletin Board.

          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  is an OTC Bulletin  Board  Quarterly
     Quote Summary prepared by NASDAQ Trading and Market Services.

                                     Reported High Bid         Reported Low Bid

     Third quarter, fiscal 1997            $3.00                     $2.50
     Fourth quarter, fiscal 1997           $4.50                     $2.75

     The above  over-the-counter  market quotations reflect inter-dealer prices,
     without retail  mark-up,  mark-down or commission  and may not  necessarily
     present actual transactions.

          (ii)  Recent  Sales of  Unregistered  Securities.  In June  1997,  the
     Company  completed a private placement of its Common Stock by which 325,000
     shares  of the  Common  Stock  were  sold at a price of $1.00  per share to
     accredited  investors  only.  The Company  did not use the  services of any
     underwriters in that transaction. The private placement was exempt from the
     registration  requirements  of the  Securities  Act of  1933,  as  amended,
     pursuant  to  Sections  4(6),  4(2),  and  3(b),  as  well as  pursuant  to
     Regulation  D  promulgated   under  that  Act.  All  of  the   certificates
     representing  shares  sold  in  the  private  placement  contain  a  legend
     denominating the shares as "restricted securities".

          A total of 340,000 shares of Common Stock were issued to two employees
     of the  Company  pursuant  to the terms of  written  employment  agreements
     between them and the Company.  The stock was issued  pursuant to employment
     agreements  covering  the period of January 1, 1997  through  December  31,
     1997. These transactions were exempt from the registration  requirements of
     the Act  under  Sections  4(6) and 4(2) as being  private  transactions  to
     accredited  investors.  The  certificates  for  the  shares  issued  to the
     employees  contain  the  legend  denominating  the  shares  as  "restricted
     securities" under the Act.

          In  October  1997,  the  Company  issued  20,000  options  to a  newly
     appointed member of the board of directors of the Company.  The transaction
     was  exempt  from the  registration  requirements  of the Act  pursuant  to
     Sections  4(6)  and  4(2) of the  Act.  The  options  vest  in  five  equal
     installments  over a period  of five  years,  with  each  option  having an
     exercise price of $1.00 per share.


                                        7

<PAGE>

          (b) As of  February  16,  1998,  there were  approximately  964 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.  Selected Financial Data.

          The following table shows a five year comparison of selected financial
     data. The information presented is in thousands of dollars,  except for the
     per share amounts.  All of the information except for fiscal year 1993, and
     except for the total assets and  stockholders'  equity presented for fiscal
     year 1994, are derived from the Company's audited financial  statements for
     December  31,  1997,  1996  and  1995,  as  well as the  Company's  audited
     financial statements for December 31, 1995 and 1994.

<TABLE>
<CAPTION>

                                                                  Year Ended December 31
                                              ----------------------------------------------------------
                                                1997          1996          1995          1994      1993
                                                ----          ----          ----          ----      ----
<S>                                             <C>           <C>           <C>           <C>      <C>
     Sales                                     6,762         4,985         5,447         3,606       452
     Cost of Sales                             3,028         2,385         1,910         1,708       269
     Gross Profit                              3,734         2,600         3,537         1,898       183
     Total Operating Expenses                  2,119         1,461         1,074           773       135
     Net Operating Income                      1,616         1,139         2,463         1,125        48
     Net Income Per Common Share               $0.13         $0.16         $0.30        $1,357       $52
     Weighted Average Shares Outstanding       8,707         7,459         7,459         0.999     0.999
     Total Assets                              2,083         1,141         1,451         1,100       126
     Stockholders' Equity (1)                  2,007           768         1,159           949         8
</TABLE>

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

(1)  The Company has not paid cash dividends on its common stock.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operation.

     Results of Operations.  For the period ending December 31, 1997 as compared
with the periods ending December 31, 1996 and December 31, 1995.

     Sales  increased from 1996 to 1997 by 35.7% and from 1995 to 1997 by 24.1%.
The Company  attributes this growth in part to the  introduction of our lip balm
product,  which  occurred in July 1996,  and in part to  expanded  international
distribution and an increased volume of sales. Prices for the Company's products
have remained relatively stable.

                                       8

<PAGE>


     Gross profit  increased from 1996 to 1997 by 43.6% and from 1995 to 1997 by
5.6%.  The Company  attributes  the  increase in gross  profit in part to volume
discounts from material suppliers and in part to increased  automation  reducing
cost of labor. Gross profit significantly  decreased from 1995 to 1996 primarily
as a result of the  Company's  shift from selling  bulk goods to  blister-carded
goods which require both higher labor and materials costs.

     Salaries  increased  from  1996 to 1997 by 79.5%  and from  1995 to 1997 by
190.8%.  This was the result of an increase to additional  staffing in sales and
engineering.

     Bad  Debts  decreased  from  1996 to 1997 by 40.4% and from 1995 to 1997 by
49.6%.  This was the result of  improved  pre-qualifying  of new  customers  and
implementation of a progressive internal collection process.

     Stock  Issued for Services in 1997 was to two  employees of the  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  Subsidiary was required to address as part of preparing for its entry
into the public marketplace.

     Gain(Loss) on Sale of Securities was zero in 1997. This was a result of the
Company's  distributing  substantially all of its securities held for investment
prior to year end 1996 and maintaining cash in liquid money markets in 1997.

     The Company was an S Corporation  through  April 30, 1997,  with net income
passing  through to the owner's  personal  income.  Effective  May 1, 1997.  the
Company  converted to a C Corporation  The $522,694 of income taxes reflects the
accrual of eight months of income taxes through December 31, 1997.

     Liquidity  and Capital  Resources.  Balance  Sheet as of December  31, 1997
Compared to December 31, 1996

     Cash   increased   $903,199.   This   is  due  to  the   creation   of  the
parent-subsidiary  relationship  upon  closing of the merger,  as  approximately
$189,000  was then held by the  parent,  approximately  $325,000  was added from
closing a private placement,  and the balance was primarily additional cash from
operations.  The Company  believes  that its cash holdings will be sufficient to
meet the Company's operating expenses and capital  requirements for at least the
next twelve months.

     Inventory  increased by approximately  32.9%.  This is a result of expanded
product lines creating a need for a broader based raw materials inventory.

     Deferred  Income tax for December 31, 1997 in the amount of $67,816 relates
to the tax benefit of the provision for returns and allowances of  approximately
$199,460, which is not deductible from taxable income until incurred.

                                       9

<PAGE>


     Accounts  payable and accrued expenses  increased by  approximately  49.2%.
This is a result of  inventories  being  higher as of December  31, 1997 than on
December 31, 1996.

     Income  Taxes  Payable  for  December  31,  1997 in the amount of  $119,586
reflects  the current  provision  for federal and state income taxes of $590,510
since May 1, 1997 computed at statutory rates.

     Additional  paid-in  capital  increased  $996,970.  This  is  a  result  of
reorganization/additional  paid in capital of $160,849,  common stock issued for
cash of $324,675;  reclassification  of undistributed S Corporation  earnings of
$171,786; and stock issued for services of $339,660.

     Retained earnings increased $241,257 (approximately 38.7%). This is a
result of reclassification of undistributed S Corporation  earnings  ($171,786),
dividends paid ($714,610) ); and net income of $1,127,653.

     Trends. The Company has been broadening its product base by capitalizing on
management's  research  and  development  abilities,  while  utilizing  existing
packaging components and manufacturing technology of the Company. This broadened
product base has given the Company more  stability in the  marketplace by making
the Company less reliant on any individual  product.  The broadened product base
has expanded the Company's  customer  base and helped to increase  business with
existing  customers.  In addition to a broadened  product base,  the Company has
established  new  markets  for its  products,  such as mass  retailers  and drug
stores,  rather than focusing on convenience  stores.  The Company  expects this
trend to continue, although sales to convenience stores remain an important part
of the Company's sales strategy.

     As the Company has  historically  developed and produced its  manufacturing
equipment,  and has  historically  committed funds to new products as sales have
warranted,  the Company  does not foresee any  material  commitment  for capital
expenditures during the 1998 fiscal year.


     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 in part because the bulk
of the Company's  current  products are primarily  very low cost,  impulse items
(under $0.99 to consumers).

     Year 2000. The Company does not use a computer system or program  developed
specifically for the business of the Company.  Rather, the Company uses software
programs and computer systems  developed by third parties and readily  available
for sale to end users.  Although the Company has not yet made an  assessment  of
its year 2000 issues, and, therefore, has not determined whether it has material
year 2000 issues,  the Company has been advised by its third party  vendors that
year 2000 compliance has been or will be achieved. Even if it is determined that
any year 2000 problem  will not pose  significant  operational  problems for the
Company's  computer systems,  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 will
be timely  converted,  or that any such  failure to  convert by another  company
could not have an adverse effect on the Company.







                                       10

<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-K in order to do so. All  statements in this Form 10-K
that are not historical  facts,  including without  limitation  statements about
management's  expectations  for any period beyond the fiscal year ended December
31,  1997,  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.

     Limited Operating History. Although the Company reported net income for the
past several year, the Company's subsidiary  (OraLabs,  Inc.) was only organized
in 1990 and therefore has a limited  operating  history upon which investors may
evaluate its  performance.  There can be no assurance that future  operations of
the Company will be profitable.  The likelihood of the Company's success must be
considered  relative  to  the  problems,   difficulties  and  delays  frequently
encountered in connection with the development and operation of a relatively new
business and the competitive environment in which the Company operates.

     Unproven  Markets for Certain of the Company's  Products.  The Company only
began  selling its sore  throat  spray and its zinc spray  products in 1997.  In
addition,  the Company is preparing  to  introduce a new line of spray  vitamins
which is completely unproven.  While the Company believes that there is a market
for such products, it has no  prior history  with  spray vitamins and  therefore


                                        11

<PAGE>



cannot be assured that those  products will be accepted in the  marketplace,  or
that if accepted,  the Company will be  profitable in that part of the Company's
business.

     Managing Growth. The Company has experienced a period of significant growth
during fiscal years ended December 31, 1997 and 1996 which 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 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,  including  the United
States  Food and Drug  Administration  ("FDA"),  the  Federal  Trade  Commission
("FTC"),  the Bureau of Alcohol,  Tobacco  and  Firearms  ("BATF")  and the Drug
Enforcement  Administration ("DEA").  Although the Company does not believe that
such  regulations  are presently  burdensome  upon the Company,  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
manufactures  products for the Company. In addition,  vitamin products have been
increasingly scrutinized by government agencies, including the area of labeling,
and increasing  regulation could adversely affect the Company's vitamin business
which has just recently been introduced by the Company.

     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.



                                       12

<PAGE>

     Furthermore,  the Company  cannot  predict  whether new domestic or foreign
legislation  regulating its  activities  will be enacted.  Such new  legislation
could have a material adverse effect on the Company.  Failure to comply with any
applicable  requirements can result in sanctions being imposed on the Company or
upon the manufacturers of its products.

     Dependence   Upon   Significant   Distributors   and  Retailers.   Rite-Aid
Corporation  accounted for more than ten percent  (10%) of the  Company's  gross
revenues in 1997. The two next largest  customers of the Company in fiscal years
1997 and 1996 were distributors who collectively accounted for approximately 10%
and 15% of gross revenues,  respectively. A loss of these customers could have a
material adverse effect on the Company's revenues or operations.

     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.
Should these relationships  terminate, or should the vendors be otherwise unable
to supply the Company with an adequate  supply of product,  the Company would be
required to establish  relationships  with new  suppliers.  Although the Company
believes  that a  replacement  supply would be readily  available on  comparable
terms,  there can be no assurance that this will be the case, and the failure to
obtain  supplies on comparable  terms could have a material  adverse effect upon
the Company.

     No  Assurance  of  Proprietary  Protection.  The  Company  has  two  patent
applications  pending. The Company also holds several domestic and international
trade marks and has two 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.  Certain of the  Company's  products are
intended  to provide  various  kinds of relief  from colds or sore  throats.  If
scientific data were to conclude that the Company's products do not provide such
relief, or if for any other reason the Company's products were not viewed by the
public as providing such relief,  there could be a material  adverse effect upon
the sales of such products.


                                       13

<PAGE>



     Seasonal  Fluctuations.  To the extent that some of the Company's  products
are intended to provide relief for certain  symptoms of common colds and chapped
lips,  sales of such  products may be seasonal.  The Company  believes  that the
consumer  market for such  products  occurs  during the primary cold season from
September to March. As a result of such fluctuations,  there can be no assurance
that the  Company  will  maintain  sufficient  flexibility  with  respect to its
working  capital needs and its ability to manufacture  and supply products to be
able to minimize the adverse effects of an unanticipated shortfall in or greater
than expected  demand for its  products.  Failure to predict  accurately  and to
respond to consumer  demand may cause the Company to produce  excess  inventory.
Conversely,  if the product  achieves  greater success than  anticipated for any
given quarter,  the Company may not have  sufficient  inventory to meet customer
demand.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

     This Item is not applicable due to the Company's status as a small business
issuer as defined in applicable regulations of the 1933 Act.

Item 8.  Financial Statements and Supplementary Data.

     Financial  statements meeting the requirements  specified in Item 8 of Form
10-K follow the  signature  page and are listed in Item 14 of this Annual Report
on Form 10-K.

Item 9.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure.

     The  information  required  by this  Item is not  included  as it has  been
previously  reported as that term is defined in the Rules  promulgated under the
1934 Act.


                                       14

<PAGE>



                                    PART III.

Item 10.  Directors and Executive Officers 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 11.  Executive Compensation.

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

Item 12.  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 13.  Certain Relationships and Related Transactions.

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



                                       15

<PAGE>

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, 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):
                 Consolidated Balance Sheets - December 31, 1997 and  1996
                 Consolidated Statements of Income for the years ended
                   December 31, 1994 through December 31, 1997
                 Consolidated Statement of Changes in Stockholders' Equity
                   from December 31, 1997, 1996 and 1995
                 Consolidated Statements of Cash Flows for the years ende
                   December 31, 1997, 1996 and 1995
                 Notes to Consolidated Financial Statements
                 Independent Auditor's Report

          2. Financial Statements (SSI Capital Corp.):
                 Balance Sheet - December 31, 1996
                 Statement of Operations and Accumulated (Deficit)
                 Statement of Cash Flows for the month ended December 31, 1996
                 Independent Auditor's Report

          3. Financial Statement Schedules:

                 All schedules have been  omitted  because  of the  absence  of
                 conditions under which they would be  required  or because  the
                 required information is included in the financial  tatements or
                 the notes thereto.

          4.  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:

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

      3.1(i)(1)            Articles of Incorporation
     3.1(ii)(2)            Amended and Restated Bylaws
        4(2)               Specimen Certificate for Common Stock
       10.1(2)             1997 Stock Plan



                                       16

<PAGE>

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

       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)             Stock Option Grant to Michael Friess
       10.5(2)             Lease Agreement Between the Company's Subsidiary and
                             Gary Schlatter
       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               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-K.
        212                List of Subsidiaries of the Company
       23.1(2)             Consent of Independent Accountants
       27.1(2)             Financial Data Schedule for OraLabs Holding Corp. and
                             Consolidated Subsidiaries
       27.2(2)             Financial Data Schedule for SSI Capital Corp.
                             (December 1996)

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

(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)  Filed herewith.
(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.

     (b)   No reports on Form 8-K have been filed during the fourth quarter of
           fiscal 1997.


                                       17

<PAGE>


                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                      ORALABS HOLDING CORP.



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

                                      By:  /s/ Emile Jordan
                                           -------------------------------------
                                           Emile Jordan, Chief Financial Officer
Date:    March 31, 1998


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

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

<S>                                       <C>                             <C>
       /s/ Gary H. Schlatter              Director, President,           March 31, 1998
 ----------------------------------       Chief Executive Officer
           Gary H. Schlatter

       /s/ Allen R. Goldstone                    Director                March 31, 1998
 ----------------------------------
           Allen R. Goldstone

       /s/ Michael I. Friess                     Director                March 31, 1998
  ---------------------------------
           Michael I. Friess

       /s/ Suzan M. Schlatter                    Director                March 31, 1998
 ----------------------------------
           Suzan M. Schlatter

</TABLE>



                                       18




<PAGE>

               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                       and

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                        December 31, 1997, 1996 and 1995









                                       F-1

<PAGE>



               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------



                                Table of Contents

                                                                      Page
                                                                      ----

         Report of Independent Certified Public Accountants            F-3

         Consolidated Financial Statements:

                  Consolidated Balance Sheets                          F-4

                  Consolidated Statements of Income                    F-5

                  Consolidated Statement of Changes in
                   Stockholders' Equity                                F-6

                  Consolidated Statements of Cash Flows                F-7

                  Notes to Consolidated Financial Statements           F-8


                                       F-2

<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------



The Board of Directors
Oralabs Holding Corp.


We have audited the  consolidated  balance  sheets of Oralabs  Holding Corp. and
Consolidated  Subsidiaries  as  of  December  31,  1997  and  1996  and  related
statements  of income,  changes in  stockholders'  equity and cash flows for the
three years ended December 31, 1997, 1996 and 1995.  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 audits.

We  conducted  our  audits  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 includes examining on a test basis,  evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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  Consolidated  Subsidiaries  as of December 31, 1997 and 1996 and the
results of its  operations,  its  changes in  stockholders'  equity and its cash
flows for the three years ended  December 31, 1997,  1996 and 1995 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-3


<PAGE>

               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                           CONSOLIDATED BALANCE SHEETS


                                                            December 31,
                                                      1997              1996
                                                    ----------       ----------
Current Assets
         Cash in bank                               $1,023,598       $  120,399
         Accounts receivable, net of
          allowance for doubtful accounts
          of $33,770 (Note 8)                          686,668          392,469
         Inventory                                     599,270          450,984
         Deferred income taxes (Note 11)                67,816             --
         Prepaid expenses                               91,863           19,128
                                                    ----------       ----------
           Total Current Assets                      2,469,215          982,980

Property and equipment, net of accumulated
  depreciation of $170,490 (Note 4)                    214,732          157,822
                                                    ----------       ----------

Total Assets                                        $2,683,947       $1,140,802
                                                    ==========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
         Accounts payable and accrued
          expenses                                  $  556,865       $  373,199
         Income taxes payable (Note 11)                119,586             --
                                                    ----------       ----------
           Total Current Liabilities                   676,451          373,199
                                                    ----------       ----------

Commitments (Notes 5,6,7,8,9,10,11 and 13)                --               --

Stockholders' Equity:
         Preferred stock - $.001 par value,
           1,000,000 shares authorized,
           None issued and outstanding                    --               --
         Common stock - $.001 par value,
           100,000,000 shares authorized,
           9,123,555 shares issued and
           outstanding                                   9,124            7,459
         Additional paid-in capital                  1,134,427          137,457
         Retained earnings                             863,945          622,688
                                                    ----------       ----------
           Total Stockholders' Equity                2,007,496          767,604
                                                    ----------       ----------

Total Liabilities and Stockholders' Equity          $2,683,947       $1,140,803
                                                    ==========       ==========


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

                                       F-4

<PAGE>
<TABLE>
<CAPTION>

                                    ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
                                    ---------------------------------------------------

                                                   STATEMENTS OF INCOME

                                                          For the Years Ended December 31
                                              1997                     1996                     1995
                                           -----------              -----------              -----------
Revenue:
<S>                                        <C>                      <C>                      <C>
      Sales                                $ 6,762,361              $ 4,985,009              $ 5,447,498
      Cost of sales                          3,027,733                2,385,076                1,910,469
                                           -----------              -----------              -----------
         Gross Profit                        3,734,628                2,599,933                3,537,029
                                           -----------              -----------              -----------
Operating Expenses
      Salaries and payroll
       taxes                                   775,765                  432,236                  266,796
      Bad debts                                 34,943                   58,670                   69,338
      Rent                                      72,362                   62,709                   24,139
      Commissions                              247,449                  201,730                  316,273
      Trade shows                               83,666                   90,542                   65,175
      Depreciation                              52,757                   47,466                   32,840
      Stock issued for services
       (Note 12)                               340,000                     --                       --
      Other operating expenses                 512,089                  567,424                  299,370
                                           -----------              -----------              -----------
       Total Operating Expenses              2,119,031                1,460,777                1,073,931
                                           -----------              -----------              -----------
Net Operating Income                         1,615,597                1,139,156                2,463,098
                                           -----------              -----------              -----------

Other Income (Expenses)
      Interest and other income                 34,750                   72,273                   70,595
      Loss on sale of
       securities                                 --                     (6,038)                (316,560)
      Interest expense                            --                     (8,284)                  (9,965)
                                           -----------              -----------              -----------
       Total Other                              34,750                   57,951                 (255,930)
                                           -----------              -----------              -----------

Net Income Before Provision
 for Income Taxes                            1,650,347                1,197,107                2,207,168
                                           -----------              -----------              -----------

Provision for income taxes
 (Note 11)
      Current                                  590,510                     --                       --
      Deferred                                 (67,816)
                                           -----------             ------------              -----------
                                               522,694

Net Income                                 $ 1,127,653              $ 1,197,107              $ 2,207,168
                                           ===========              ===========              ===========

Net Income per Common Share                $       .13              $       .16              $       .30
                                           ===========              ===========              ===========

Weighted Average Shares
 Outstanding                                 8,707,362                7,458,784                7,458,784
                                           ===========              ===========              ===========

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

                                                     F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                         ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
                                         ---------------------------------------------------

                                            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                           From December 31, 1994 through December 31, 1997



                                         Preferred Stock           Common Stock          Additional
                                       ------------------      --------------------       Paid-in        Retained
                                       Shares      Amount      Shares        Amount       Capital        Earnings        Total
                                       ------      ------      -------       ------       -------        --------        -----
<S>                                   <C>         <C>         <C>            <C>            <C>
Balance at December 31, 1994               -           -      7,458,784     $   7,459    $  135,212     $   822,029    $   964,700

Distributions                              -           -              -             -             -     (2,013,255)    (2,013,255)

Net income for the year
ended December 31, 1995                    -           -              -             -             -       2,207,168      2,207,168
                                    --------    --------     ----------     ---------    ----------     -----------     ----------
Balance at December 31, 1995               -           -      7,458,784         7,459       135,212       1,015,942      1,158,613

Cash contributed                           -           -              -             -         2,245               -          2,245

Distributions                              -           -              -             -             -     (1,590,361)    (1,590,361)

Net income for the year
ended December 31, 1996                    -           -              -             -             -       1,197,107      1,197,107
                                    --------    --------     ----------     ---------    ----------     -----------    -----------

Balance at 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                -           -              -             -       171,786       (171,786)              -
earnings

Stock issued for services                  -           -        340,000           340       339,660               -        340,000

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

Net income for the year
ended December 31, 1997                    -           -              -             -             -       1,127,653      1,127,653
                                    --------    --------     ----------     ---------    ----------     -----------    -----------
Balance at December 31, 1997               -    $      -      9,123,555     $   9,124    $1,134,427     $   863,945    $ 2,007,496
                                    ========    ========     ==========     =========    ==========     ===========    ===========



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

                                                             F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                    ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
                                    ---------------------------------------------------

                                                 STATEMENTS OF CASH FLOWS

                                                              For the Years Ended December 31
                                                    1997                    1996                   1995
                                                 ----------              -----------             -----------
<S>                                              <C>                     <C>                     <C>
Cash Flows from Operating Activities:
      Net income                                 $ 1,127,653             $ 1,197,107             $ 2,207,168
      Adjustments to reconcile net
       income to net cash used
       in operating activities
        Depreciation                                  52,757                  47,466                  32,840
        Increase (decrease) in
         accounts payable and
         accrued expenses                            183,666                 210,463                  (2,041)
        Decrease (Increase) in
         accounts receivable                        (294,199)                 56,045                (257,826)
        Increase in income taxes
         payable                                      51,770                    --                      --
        Decrease in notes
         receivable                                     --                      --                    67,026
        (Increase) in inventory                     (148,286)               (173,459)               (189,242)
        Stock issued for services                    340,000                    --                      --
        Other, net                                   (72,634)                    685                 (17,564)
                                                 -----------             -----------             -----------
  Net Cash Provided by
       Operating Activities                        1,240,727               1,338,307               1,840,361
                                                 -----------             -----------             -----------

Cash Flows from Investing Activities:
      Investments in securities                         --                   175,500                (175,500)
      Margin account payable                            --                  (129,556)                129,556
      Investment in property and
       equipment                                    (109,767)               (134,480)                (57,514)
                                                 -----------             -----------             -----------
  Net Cash (Used in) Investing
   Activities                                       (109,767)                (88,536)               (103,458)
                                                 -----------             -----------             -----------

Cash Flows from Financing Activities:
      Stock issued and additional
       paid-in capital                               486,849                   2,245                  23,000
      Distributions                                 (714,610)             (1,590,361)             (2,013,255)
                                                 -----------             -----------             -----------
  Net Cash (Used in)
       Financing Activities                         (227,761)             (1,588,116)             (1,990,255)
                                                 -----------             -----------             -----------

Increase (Decrease) in Cash                          903,199                (338,345)               (253,352)

Cash, Beginning of Period                            120,399                 458,744                 712,096
                                                 -----------             -----------             -----------

Cash, End of Year                                $ 1,023,598             $   120,399             $   458,744
                                                 ===========             ===========             ===========

Interest Paid                                    $      --               $     8,284             $     9,965
                                                 ===========             ===========             ===========

Income Taxes Paid                                $   470,924             $      --               $      --
                                                 ===========             ===========             ===========


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

                                                            F-7
</TABLE>

<PAGE>



               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                        December 31, 1997, 1996 and 1995

(1) Summary of Significant Accounting Policies
    ------------------------------------------

     This summary of significant  accounting  policies of Oralabs  Holding Corp.
     and  Consolidated  Subsidiaries,  (the  Company) is  presented to assist in
     understanding the Company's financial statements.  The financial statements
     and  notes  are   representations  of  the  Company's   management  who  is
     responsible for their integrity and objectivity.  These accounting policies
     conform  to  generally  accepted   accounting   principles  and  have  been
     consistently applied in the preparation of the financial statements.

     (a) Organization and Nature of Operations
         -------------------------------------

          Oralabs Holding Corp.  (OHC) a Colorado  corporation was formed during
          June  1997.  SSI  Capital  Corp.  (SSI)  a New  York  corporation  was
          incorporated  on January 30, 1981.  SSI  originally  had a November 30
          year end but has recently changed to a December 31 year end. Effective
          August 22, 1997,  SSI was merged into Oralabs  Holding  Corp.  and the
          outstanding  shares of SSI were converted to shares of Oralabs Holding
          Corp.  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 has
          selected December 31 as its fiscal year end. ORALABS is a wholly-owned
          subsidiary of OHC.

          OL Sub Corp, a Colorado  corporation  was  incorporated on October 23,
          1997. As of December 31, 1997 this corporation was inactive.

          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.  since  inception  (see  Note 12).  All
          intercompany accounts and transactions have been eliminated.

                                      F-8

<PAGE>


               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                    NOTES TO FINANCIAL STATEMENTS, CONTINUED
                        December 31, 1997, 1996 and 1995

(1) Summary of Significant Accounting Policies, Continued
    ------------------------------------------------------

     (b) Cash and Cash Equivalents
         -------------------------

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

     (c) Inventories
         -----------

          Inventories  consist of raw  materials  and  finished  goods which are
          carried at the lower of average cost or market value.

     (d) Property and Equipment
         ----------------------

          Property and equipment are carried at cost.  Depreciation  of property
          and equipment 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

          For federal  income tax purposes,  depreciation  is computed using the
          accelerated  cost recovery  system and the modified  accelerated  cost
          recovery system.  Expenditures for major renewals and betterments that
          extend the useful lives of property  and  equipment  are  capitalized.
          Expenditures  for  maintenance  and  repairs are charged to expense as
          incurred.

     (e) Income Taxes
         ------------

          No  provision  for  income  tax has  been  provided  in the  financial
          statements for 1996 and 1995 since the Company had elected to be taxed
          under Subchapter S of the Internal Revenue Code, whereby all income or
          losses  flow  through to the  stockholder  for  income  tax  reporting
          purposes.  Effective  May 1,  1997,  the S  Corporation  election  was
          terminated. See Note 11.

                                      F-9


<PAGE>

               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                    NOTES TO FINANCIAL STATEMENTS, CONTINUED
                        December 31, 1997, 1996 and 1995

(1) Summary of Significant Accounting Policies, Continued
    -----------------------------------------------------

     (f) Use of Estimates
         ----------------

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

     (g) Marketable Securities
         --------------------

          The  Company's  former  investments  in  marketable   securities  were
          considered  trading securities since they were bought and held for the
          purpose of selling them in the near term. Unrealized holding gains and
          losses for trading  securities  have been included in the statement of
          operations with realized gains and losses. See Note 2.

(2) Marketable Securities
    ---------------------

     During the year ended  December 31, 1996 the Company's  marketable  trading
     securities  had  been  distributed  to the  Company's  shareholders.  As of
     December 31, 1996 the Company had a margin account payable related to these
     securities totalling $80 shown as a liability in the financial  statements.
     During 1996 the Company  incurred $8,284 of interest expense on this margin
     account.

(3) Inventories
    -----------

     At December 31, 1997 and 1996 inventories consisted of the following:

                                               1997            1996
                                            ---------       -------
          Raw materials                     $ 599,270       $ 402,778
          Finished goods                            -          48,206
                                            ---------       ---------
                                            $ 599,270       $ 450,984
                                            =========       =========

     Inventories  are stated at the lower of cost or market.  Cost is determined
     by the average cost method.

(4) Property and Equipment
    ----------------------

     Property and equipment at December 31, 1996 are summarized as follows:

                                                  1997             1996
                                               ---------       --------
        Machinery and equipment                $ 324,269       $  214,501
        Leasehold improvements                    60,954           60,954
                                               ---------       ----------
                                                 385,223          275,455
                 Less accumulated
                  depreciation                  (133,276)        (117,633)
                                               ---------       ----------
                                               $ 251,947       $  157,822
                                               =========       ==========


                                      F-10

<PAGE>



               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                    NOTES TO FINANCIAL STATEMENTS, CONTINUED
                        December 31, 1997, 1996 and 1995

(5) Transaction with Related Party
    ------------------------------

     The Company pays the monthly lease payments and all operating  expenses for
     two vehicles used by the Company's  president and his spouse who is also an
     officer  of the  Company.  Lease  payments  for  these two  vehicles  total
     approximately $1,150 per month.

(6) Operating Lease
    ---------------

     The  Company  leases  its  office  and  manufacturing  facilities  under an
     operating lease for a building owned by the Company's President.  The lease
     commenced September 1, 1995 with monthly payments of $4,000. Effective July
     1, 1996 the payment was increased to $5,500 per month based upon additional
     space being used by the Company.  The lease expires September 1, 2000. This
     lease is a net lease whereby the Company pays all expenses. The Company has
     incurred $60,954 of leasehold improvements related to this property,  which
     are being amortized on a straight-line basis over the five year term of the
     lease.

     The  following  is a schedule by years of future  minimum  rental  payments
     required under the operating lease as of December 31, 1997:


                    Year Ending
                    December 31,                           Amount
                    ------------                         ----------
                       1998                              $   66,000
                       1999                                  66,000
                       2000                                  44,000
                                                         ----------
      Total minimum payments required                    $  176,000
                                                         ==========

(7) 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 trade accounts  receivables.  Concentrations of credit with
     respect  to trade  receivables  are  limited  due to the  large  number  of


                                      F-11

<PAGE>




               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                    NOTES TO FINANCIAL STATEMENTS, CONTINUED
                        December 31, 1997, 1996 and 1995

(7) Concentration of Business and Credit Risk, Continued
    ----------------------------------------------------

     customers  comprising  the  Company's  customer  base and their  dispersion
     across different  industries and geographic  locations.  As of December 31,
     1997, the Company had no significant  concentrations  of credit risk, other
     than the  Company  had  $1,029,846  invested  in a mutual  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.

(8) Major Customers
    ---------------

     The Company  currently  has one  customer  with net  purchases  of $890,430
     during the year ended  December 31, 1997.  During the years ended  December
     31,  1996 and 1995 one  customer  had net  purchases  from the  Company  of
     $433,353   and   $615,937,    respectively.   These   purchases   represent
     approximately 13%, 9% and 11% respectively of gross sales revenue.

(9) Line of Credit
    --------------

     The  Company  entered  into a line of credit  agreement  with a bank in the
     amount of $750,000  which expires May 13, 1998. As of December 31, 1997 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.

(10) Terminated Agreement
     --------------------

     The Company had an agreement with an employee whereby  compensation paid to
     the employee equaled 2% of sales. In addition,  according to the agreement,
     the  employee  would  receive 2% of the sales  price of the  Company if the
     Company  is sold.  The  agreement  had a  provision  that  allowed  for its
     termination by written notice during a thirty day period each year prior to
     September  1. On April 30,  1997,  the  agreement  was  terminated  and the
     Company  granted 186,000 stock options to this employee at $1.00 per share.
     The option  terminates on April 1, 2007.  This option grant vests one third
     immediately and the balance over future years.



                                      F-12

<PAGE>

               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                    NOTES TO FINANCIAL STATEMENTS, CONTINUED
                        December 31, 1997, 1996 and 1995

(11) Income Taxes
     ------------

     Prior to completion of the business combination,  ORALABS had elected to be
     taxed under Subchapter S of the Internal Revenue Service Code. The election
     was automatically terminated effective May 1, 1997. No provision for income
     taxes was  recorded  prior to May 1, 1997  since  shareholders  of  ORALABS
     included the net income from the Company on their personal returns and were
     responsible  for the  payment of the  related  income  taxes.  ORALABS  had
     $171,786  of  undistributed   earnings  on  May  1,  1997  which  has  been
     reclassified  in  the  financial   statements  from  retained  earnings  to
     additional   paid-in  capital.   This  treatment   assumes  a  constructive
     distribution to the owners followed by a contribution to the capital of the
     Company.

     Income taxes payable at December 31, 1997 totalling  approximately $119,586
     and the current  provision  for income taxes of $590,510  relate to Federal
     and State  income  taxes on taxable  income  since May 1, 1997  computed at
     statutory  rates.  The  deferred  income  tax  receivable  and  credit  for
     provision for deferred income taxes of $67,816 relate to the tax benefit of
     the provision for returns and allowances of approximately  $199,460,  which
     is not deductible from taxable income until incurred.

(12) 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.  See Note 1 for  merger  of SSI into  Oralabs
     Holding Corp.


                                      F-13

<PAGE>


               ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
               ---------------------------------------------------

                    NOTES TO FINANCIAL STATEMENTS, CONTINUED
                        December 31, 1997, 1996 and 1995

(13) Stock Options
     -------------

     The Company has adopted an incentive  stock option plan for employees.  The
     option terms are for ten years at $1.00 per share.  As of December 31, 1997
     the Company had outstanding 500,000 incentive options including the 186,000
     described in Note 10. These options vest on an annual percentage basis over
     the future terms of employment.

                                      F-14




<PAGE>

                                SSI CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                                       and

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                                December 31, 1996









                                       F-1

<PAGE>



                                SSI CAPITAL CORP.
                                -----------------
                          (A DEVELOPMENT STAGE COMPANY)


                                Table of Contents

                                                                          Page
                                                                          ----

         Report of Independent Certified Public Accountants                F-3

         Financial Statements:

                  Balance Sheet                                            F-4

                  Statement of Operations and Accumulated (Deficit)        F-5

                  Statement of Cash Flows                                  F-6

                  Notes to Financial Statements                            F-7


                                       F-2

<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



The Board of Directors
SSI Capital Corp.


We have audited the balance  sheet of SSI Capital  Corp. as of December 31, 1996
and related  statements of operations and  accumulated  (deficit) and cash flows
for the one month period ended December 31, 1996. 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 includes examining on a test basis,  evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of SSI Capital  Corp.  as of
December  31, 1996 and the  results of its  operations,  changes in  accumulated
(deficit) and its cash flows for the one month period ended December 31, 1996 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


March 12, 1998

                                       F-3

<PAGE>

                                SSI CAPITAL CORP.
                                -----------------
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                December 31, 1996

Current Assets
         Cash in bank                                                 $ 192,146
                                                                      ---------

Total Assets                                                          $ 192,146
                                                                      =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities
         Accrued expenses                                             $  27,760
                                                                      ---------
           Total Current Liabilities                                     27,760
                                                                      ---------

Commitments (Note 2)                                                       --

Stockholders' Equity:
         Preferred stock - $.01 par value
          1,000,000 shares authorized
          none issued and outstanding                                      --
         Common stock - $.001 par value,
           100,000 shares authorized;
           1,749,541 shares issued and
           outstanding                                                    1,749
         Additional paid-in capital                                     182,066
         Accumulated (deficit)                                          (19,429)
                                                                      ---------
           Total Stockholders' Equity                                   164,386

Total Liabilities and Stockholders' Equity                            $ 192,146
                                                                      =========


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

                                       F-4

<PAGE>



                                SSI CAPITAL CORP.
                                -----------------
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENT OF OPERATIONS AND ACCUMULATED (DEFICIT)

                                                           For the One
                                                           Month Ended
                                                           December 31,
                                                              1996
                                                           -----------
Revenue:
      Interest income                                      $       651
                                                           -----------


Operating Expenses
      Legal and professional                                       731
      Transfer fees                                                142
      Storage                                                      667
      Miscellaneous                                                 26
      Other                                                        117
                                                           -----------
        Total Expenses                                           1,683
                                                           -----------
Net Loss                                                   $    (1,032)
                                                           ===========

Loss per Share                                             $       nil
                                                           ===========

Weighted Average Shares Outstanding                          1,749,541
                                                           ===========


Accumulated (Deficit), Beginning of Period                 $   (18,397)

Net Loss                                                        (1,032)
                                                           -----------

Accumulated (Deficit), End of Period                       $   (19,429)
                                                           ===========



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

                                       F-5

<PAGE>



                                SSI CAPITAL CORP.
                                -----------------
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS

                                                                    For the One
                                                                    Month Ended
                                                                    December 31,
                                                                        1996
                                                                    ------------
Cash Flows from Operating Activities:
      Net loss                                                      $  (1,032)
      Changes in operating liabilities                                    176
                                                                    ---------

Net Cash (Used by) Operating Activities                                  (856)

Cash, Beginning of Period                                             193,002
                                                                    ---------
Cash, End of Year                                                   $ 192,146
                                                                    =========



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

                                       F-6

<PAGE>



                                SSI CAPITAL CORP.
                                -----------------
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

(1) Summary of Significant Accounting Policies.
    -------------------------------------------

     This summary of significant  accounting policies of SSI Capital, Inc, (SSI)
     is presented to assist in understanding the Company's financial statements.
     The financial  statements  and notes are  representations  of the Company's
     management who is responsible  for their integrity and  objectivity.  These
     accounting policies conform to generally accepted accounting principles and
     have  been  consistently  applied  in  the  preparation  of  the  financial
     statements.

     (a) Nature of Operations
         --------------------

          SSI Capital Corp.  (SSI) a New York  corporation,  was incorporated on
          January 30, 1981.  SSI  originally  had a November 30 year end and has
          changed its year end to December 31. This financial statement has been
          prepared for the one month transition  period related to the change in
          fiscal  year end. As of  December  31,  1996 the Company was  inactive
          other  than  it  was  attempting  to  locate  a  business  combination
          candidate (see Note 2).

     (b) Use of Estimates
         ----------------

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

(2) Subsequent Event - Business Combination
    ---------------------------------------

     Effective May 1, 1997 SSI and Oralabs,  Inc. (ORALABS) completed a business
     combination whereby ORALABS became a wholly-owned  subsidiary of SSI. Prior
     to the  business  combination,  SSI had  1,749,541  shares of common  stock
     outstanding.  An additional  250,000  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  680,000


                                       F-7

<PAGE>


                                SSI CAPITAL CORP.
                                -----------------
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

(2) Subsequent Event - Business Combination, Continued
    --------------------------------------------------

     shares of SSI on May 1, 1997. Also on May 1, 1997, 14,917,399 shares of SSI
     were  issued  for  the   ownership  of  ORALABS.   As  a  result  of  those
     transactions,  ORALABS became a  wholly-owned  subsidiary of SSI. Since the
     former  controlling  shareholders of ORALABS own  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.







                                       F-8


<PAGE>


                                  EXHIBIT LIST

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

3.1 (i)(1)     Articles of Incorporation
3.1(ii)(2)     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)        Stock Option Grant to Michael Friess
10.5(2)        Lease  Agreement  Between  the  Company's   Subsidiary  and  Gary
                 Schlatter
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          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-K.
21(2)          List of subsidiaries of the Company
23.1(2)        Consent of Independent Accountants
27.1(2)        Financial   Data   Schedule  for  OraLabs   Holding   Corp.   and
                 Consolidated Subsidiaries
27.2(2)        Financial Data Schedule for SSI Capital Corp. (December 1996)

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(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)  Filed herewith.
(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.