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


(Mark One)
|X|

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

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

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

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

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

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

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

Title of each class                   Name of each exchange on which registered
        None
-------------------                   ------------------------------------------

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

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

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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

                                  Yes  X   No
                                     -----    -----

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

State issuer's revenues for its most recent fiscal year : $7,090,016 As of March
25, 1999, the aggregate market value of common stock held by non-affiliates of
the Registrant, computed by reference to the last trade of the common stock on
that date, was approximately $4,512,165. (Issuers involved in bankruptcy
proceedings during the past five years) Check whether the issuer has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan confirmed by a
court. Yes _______ No _______

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

Documents incorporated by reference. Portions of the Company's definitive Proxy
Statement to be mailed to stockholders in connection with the Annual Meeting of
Stockholders of the Company to be held on May 27, 1999 (the "1998 Definitive
Proxy Statement"), which will be filed with the Commission not later than 120
days after the end of the fiscal year to which this report relates, are
incorporated by reference in Part III hereof.

                     Transitional Small Business Disclosure
                               Format (Check one):
                                Yes         No   X
                                    -----      -----

<PAGE>


                                     PART I


Explanatory Note: The purpose of this Amendment is to amend the Company's Annual
Report on Form 10-KSB for the period ended December 31, 1998 (the "Original
Filing") to revise certain portions of the Description of Business-Products
Launched in 1998, Management's Discussion and Analysis, the Financial Statements
and the list of Exhibits. This report continues to speak as of the date of the
Original Filing and the Company has not updated the disclosure in this report to
speak to any later date. While this report primarily relates to the historical
period covered, events may have taken place since the date of the Original
Filing that might have been reflected in this report if they had taken place
prior to the Original Filing.


Item 1.  Description of Business.

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

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

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

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

     In 1996 the Subsidiary introduced a line of lip balms sold in a patented
mini-size package, in furtherance of the Subsidiary's consumer impulse marketing
strategy. In addition, three new SPF- 30 sun block lip balms were introduced. In
1997 OraLabs introduced its extreme sour drops, which are a line of liquid sour
candy drops packaged in the same small bottle as the traditional Ice Drops(R).


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<PAGE>



The product was developed to capitalize upon what the Subsidiary believed was a
growing market for sour, tart, hard candies being purchased by pre-teens and
teenagers.

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

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

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

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

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

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

     The Company's products and packaging have been conceptualized and developed
in-house. The Company's breath freshener and lip balm products are marketed from
and packaged at the Company's manufacturing facility in Englewood, Colorado.
Most packaging, filling and automated manufacturing equipment has been designed,
built and maintained by the Company's own staff. This allows the Company to
rapidly introduce and manufacture new products, reducing lengthy lead times


                                        3

<PAGE>



and some of the cost of capital expenditures associated with some new product
introductions. It also allows the Company to test new products before committing
capital to full-scale manufacturing endeavors. To produce the Company's
nutritional supplements, the Company typically buys some or all of the raw
materials and contracts with third parties to produce the final products.

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

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

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

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

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

                                        4

<PAGE>


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


     The following tables show the amount of sales and cost of sales for 5-HTP
and the other nutritional supplements for 1998 (no sales of these products were
made in 1997):

--------------------------------------------------------------------------------
                           5-HTP
                           -----
Sales                                                           $ 284,050
Cost of Sales                                                   $ 157,343
--------------------------------------------------------------------------------
                         VITAMIN E
                         ---------
Sales                                                           $   9,480
Cost of Sales                                                   $   6,137
--------------------------------------------------------------------------------
                           BEARS
                           -----
Sales                                                           $  79,896
Cost of Sales                                                   $  52,072
--------------------------------------------------------------------------------
                      MSM/GLUCOSAMINE
                      ---------------
Sales                                                           $  48,994
Cost of Sales                                                   $  32,103
--------------------------------------------------------------------------------


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

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

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



                                        5

<PAGE>


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

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

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

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

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

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

          Patents, Trademarks, Licenses, Franchises and Concessions. Although
there can be no assurance of proprietary protection respecting pending patents
and trademarks held by the Company (see, "Cautionary Statement Regarding
Forward-Looking Statements, No Assurance of Proprietary Protection"), and
although the Company intends to vigorously seek to enforce and protect its


                                        6

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

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

          Government Regulation. The Company's breath freshener and lip balm
products are not subject to burdensome governmental regulation (see Cautionary
Statement on Governmental Regulation below). However, the manufacturing,
packaging, labeling, advertising, distribution and sale of the Company's
nutritional supplements are subject to regulation by one or more governmental
agencies, the most active of which is the Food and Drug Administration ("FDA"),
which regulates those products under the Federal Food, Drug, and Cosmetic Act
("FDCA") and regulations promulgated thereunder. These products are also subject
to regulation by the Federal Trade Commission ("FTC") ,the Consumer Product
Safety Commission ("CPSC"), the United States Department of Agriculture ("USDA")
and the Environmental Protection Agency ("EPA"). The Company's activities are
also regulated by various agencies of the states, localities and foreign
countries to which the Company distributes its products and in which the
Company's products are sold. The FDCA has been amended several times with
respect to dietary supplements, most recently by the Nutrition Labeling and
Education Act of 1990 ("NLEA";) and the Dietary Supplement Health and Education
Act of 1994 ("DSHEA").

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

          The FTC, which exercises jurisdiction over the advertising of
nutritional and dietary supplements under the Federal Trade Commission Act, has
in the past several years instituted enforcement actions against several
nutritional supplement companies alleging false and misleading advertising of
certain products. These enforcement actions have resulted in the payment of
fines and/or consent decrees by certain of the companies involved. The FTC


                                        7

<PAGE>


continues to monitor advertising with respect to nutritional and dietary
supplements. The Company has not been the subject of any FTC inquiries or
actions.

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

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

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

Item 2.  Description of Property.

     The Company's headquarters are located in an office-warehouse building of
approximately 16,000 square feet located in Englewood, Colorado, which the
Company leases from the Company's President. The property includes the executive
offices of the Company, as well as the Company's manufacturing facilities and a
portion of its warehouse facilities. The Company's lease expires in September
2000, and the Company believes that its rental rate is comparable to that which
would be charged by an unaffiliated landlord. The Company also leases an
additional approximate 18,000 square feet of warehouse space in a building
located near the Company's headquarters, which is leased from an entity solely
owned by the Company's President. The lease expires in June 2003, and the
Company believes that its rental rate is comparable to that which would be
charged by an unaffiliated landlord. (See "Certain Relationships and Related
Transactions" incorporated by reference to the 1998 Definitive Proxy Statement.)

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

Item 3.  Legal Proceedings.

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


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<PAGE>



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.




                                        9

<PAGE>



                                     PART II

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

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

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

                                     Reported High Bid        Reported Low Bid

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

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

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

          In June 1998, the Company issued 5,000 options to each of two,
non-employee members of the board of directors of the Company under the
Company's 1997 Non-Employee Directors' Option Plan. The transactions were exempt
from the registration requirements of the Act pursuant to Sections  4(6) and



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4(2) of the Act. The options vest in four equal installments over a period of
four years, with each option having an exercise price of $4.25 per share.

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

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

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

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


     Product sales decreased approximately $209,000 or 3%. The Company's returns
and allowances increased approximately $299,000. The Company recorded
approximately $690,000 in returns and allowances for 1998, substantially from
cough and cold (zinc and sore throat spray) product returns. The returns were
charged against sales. The returns were caused by poor sale of the products at
the retail level. The Company believes that the main reason for poor sales was
that the unique pocket size, spray container of the zinc products did not
receive the Company's anticipated acceptance by consumers (see "Trends" below).
The Company does not anticipate any material cough and cold returns in 1999 and
customers who returned the products have remained customers of the Company
through purchases of the Company's lip care and oral care product lines.

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


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

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


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

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

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

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

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

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

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

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


     As discussed in "Trends" below, the Company does not believe that the
phasing out of zinc products will have an adverse effect upon the Company's
future financial position or liquidity.



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<PAGE>



     Trends. The phasing out of zinc products will have no further impact on the
financial position, results of operations or liquidity of the Company as the
product was written off and disposed of as of December 31, 1998 in the amount of
$66,024. The Company may continue to seek to sell or otherwise dispose of the
remaining sore throat spray inventory of $138,699, and if no sale or disposition
occurs, the Company intends to write off any remaining inventory prior to the
end of 1999.

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


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

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

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

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

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


                                       13

<PAGE>



     The Company does not believe that the cost of becoming year 2000 compliant
will be material to the financial condition of the Company. To date the Company
has incurred minor expenses, primarily for assessment of the year 2000 issue,
development of a modification plan, and the installation of a year 2000
compliant version of its financial, inventory, and production software. The
Company will be replacing its network server and upgrading its telephone systems
for a total cost of approximately $20,000, which will be depreciated on a
straight line basis over five years.


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

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:

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

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


                                       14

<PAGE>


     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.

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

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

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


                                       15

<PAGE>


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

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

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

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


                                       16

<PAGE>


it occurs, will require the Company to improve its financial controls, operating
procedures and management information systems, and to train, motivate and manage
its employees.

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

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

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

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

Item 7.  Financial Statements.

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


                                       17

<PAGE>


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

     Effective December 29, 1998, the firm of Ehrhardt Keefe Steiner & Hottman
P.C. was retained as the Company's independent auditors and the firm of former
auditors, Schumacher & Associates, Inc. was dismissed. In addition, on May 12,
1997, shortly after the time of the completion of the merger transaction by
which OraLabs, Inc. (the Company's subsidiary) became a wholly-owned subsidiary
of SSI Capital Corp. (the predecessor of the Company), the auditors retained by
SSI Capital Corp. were dismissed and replaced with Schumacher & Associates,
Inc., which had then been the independent auditors for OraLabs, Inc. In both
cases, the firm of auditors being dismissed have not rendered a report on the
Company's financial statements which contained an adverse opinion or disclaimer
of opinion, or was modified as to uncertainty, audit scope, or accounting
principles, and there were no disagreements between the Company and its former
accountant on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure. These transactions were
previously reported on Forms 8-K filed on January 4, 1999 and May 14, 1997.

                                    PART III

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

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

<TABLE>
<CAPTION>

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

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


                                       18

<PAGE>



Item 10.  Executive Compensation.

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

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

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

Item 12.  Certain Relationships and Related Transactions.

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

                                     PART IV

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

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

         1.       Consolidated Financial Statements (OraLabs Holding Corp. and
                  Consolidated Subsidiaries):
                           Independent Auditors' Report
                           Consolidated Balance Sheet - December 31, 1998
                           Consolidated Statements of Operations for the years
                           ended December 31, 1998 and December 31, 1997
                           Consolidated Statement of Stockholders' Equity from
                           December 31, 1996 through December 31, 1998
                           Consolidated Statements of Cash Flows for the years
                           ended December 31, 1998 and 1997
                           Notes to Consolidated Financial Statements

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


                                       19

<PAGE>
<TABLE>
<CAPTION>



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

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

       23.3(6)     Consent of Independent Public Accountants (Ehrhardt Keefe Steiner &
                   Hottman P.C.)
       23.4(6)     Consent of Independent Public Accountants (Schumacher & Associates,
                   Inc.)

       27.(6)      Financial Data Schedule for OraLabs Holding Corp. and Consolidated
                   Subsidiaries
</TABLE>


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

                                       20

<PAGE>



1    Incorporated herein by reference to Exhibit C of the Definitive Information
     Statement filed by the Company's predecessor, SSI Capital Corp., on July
     24, 1997.

2    Incorporated herein by reference to the Company's Form 10-K filed for
     fiscal year 1997.

3    Incorporated herein by reference to Exhibit B of the Form 8-K filed by the
     Company's predecessor, SSI Capital Corp., on May 14, 1997.

4    Incorporated herein by reference to Exhibit A of the Form 8-K filed by the
     Company's predecessor, SSI Capital Corp., on May 14, 1997.


5    Incorporated by reference to the Company's Form 10-KSB filed for the fiscal
     year 1998.

6    Filed herewith.


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


                                       21

<PAGE>

                                   SIGNATURES


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

                                  ORALABS HOLDING CORP.



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

                                  By:      /s/ Emile Jordan
                                           -------------------------------------
                                           Emile Jordan, Chief Financial Officer
Date:    February 7, 2000


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

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

  /s/ Gary H. Schlatter              Director, President,       February 7, 2000
-------------------------------
    Gary H. Schlatter               Chief Executive Officer

  /s/ Allen R. Goldstone                   Director             February 7, 2000
------------------------------
   Allen R. Goldstone

 /s/ Michael I. Friess                     Director             February 7, 2000
------------------------------
   Michael I. Friess


                                       22

<PAGE>

                              ORALABS HOLDING CORP.
                                AND SUBSIDIARIES

                              Financial Statements
                           December 31, 1998 and 1997






<PAGE>

                     ORALABS HOLDING CORP. AND SUBSIDIARIES





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


                                                                        Page
                                                                        ----

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

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

Consolidated Financial Statements

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

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

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

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

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


<PAGE>
                          INDEPENDENT AUDITORS' REPORT



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


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

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

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




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

February 24, 1999
Denver, Colorado


                                      F-1
<PAGE>


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

The Board of Directors
Oralabs Holding Corp.

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

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

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

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


February 24, 1998


                                      F-2
<PAGE>


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


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

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

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


                      Liabilities and Stockholders' Equity
Current liabilities
   Accounts payable                                                   $  858,866
   Accrued liabilities                                                    59,432
   Reserve for inventory obsolescence                                    137,758
   Income taxes payable (Note 10)                                        106,294
                                                                      ----------
     Total current liabilities                                         1,162,350


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

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

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

Total liabilities and stockholders' equity                            $4,051,246
                                                                      ==========

                See notes to consolidated financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                            ORALABS HOLDING CORP. AND SUBSIDIARIES

                             Consolidated Statements of Operations


                                                                                 December 31,
                                                                   --------------------------------------
                                                                        1998                     1997
Revenue                                                            --------------          --------------
<S>                                                                <C>                     <C>
   Product sales                                                   $    6,553,331          $    6,762,361

   Services income - related party (Note 4)                               536,685                     --

   Cost of sales                                                        3,853,959               3,256,794
                                                                   --------------          --------------
     Gross profit                                                       3,236,057               3,505,567
                                                                   --------------          --------------

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

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

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

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

Provision for income taxes (Note 10)
   Current                                                                473,211                 483,180
   Deferred                                                                20,605                 (67,816)


                                                                   --------------          --------------
                                                                          493,816                 415,364
                                                                   --------------          --------------


Net income before pro forma adjustments                                   818,559               1,234,983
Provision for income taxes - pro forma (Note 10)                             --                  107,330
                                                                   --------------          --------------


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

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

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

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

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

                        See notes to consolidated financial statements.

                                              F-4
<PAGE>


                                  ORALABS HOLDING CORP. AND SUBSIDIARIES

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



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

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

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

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

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

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

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

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

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

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

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

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

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



                               See notes to consolidated financial statements.

                                                     F-5
<PAGE>

                            ORALABS HOLDING CORP. AND SUBSIDIARIES

                             Consolidated Statements of Cash Flows

                                                                                 December 31,
                                                                    -----------------------------------
                                                                        1998                    1997
                                                                    -----------             -----------
Cash flows from operating activities
   Net income                                                       $   818,559             $ 1,127,653
                                                                    -----------             -----------
   Adjustments to reconcile net income
    to net cash (used in) provided by
    operating activities
   Depreciation                                                          86,943                  52,757
   Deferred taxes                                                        27,697                    --
   Stock issued for services                                             42,700                 340,000
   Changes in assets and liabilities
    Accounts payable                                                    550,941                 183,666

    Accrued expenses                                                      9,952                   --
    Reserve for inventory obsolescence                                  (61,702)
    Accounts receivable                                                (438,757)               (294,199)
    Inventory                                                        (1,362,867)               (148,286)
    Income taxes payable                                                (13,292)                 51,770
    Other current assets                                                (33,379)                   --
    Other, net                                                             --                   (72,634)
                                                                    -----------             -----------

                                                                     (1,191,764)                113,074
                                                                    -----------             -----------
       Net cash (used in) provided by operating activities             (373,205)              1,240,727
                                                                    -----------             -----------

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

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

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

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

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

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

                              See notes to consolidated financial statements.

                                                   F-6
</TABLE>

<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

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

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

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

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

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

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

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

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

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

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

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

                                      F-7


<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

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

                                                     Years
                                                     -----

      Machinery and equipment                         5-7
      Leasehold improvements                           5

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


The Company recognized revenue in accordance with the criteria set forth in SFAS
48. Revenue is recognized as product is shipped net of estimated returns. The
Company allows returns for defecive product and records an estimate of these
returns based upon historical operations.


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

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

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

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

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

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

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

                                      F-8
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

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

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

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

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

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

                                      F-9

<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

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

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

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

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

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

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of temporary cash investments and accounts
receivable. As of December 31, 1998, the Company had no significant
concentrations of credit risk, other than the Company had $304,642 invested in a
money market fund (Note 6).



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

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

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

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

                                      F-10

<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

Property and equipment consisted of the following:
                                                             December 31,
                                                                1998
                                                            -------------
Machinery and equipment                                     $     577,292
Leasehold improvements                                            111,545
                                                            -------------
                                                                  688,837
         Less accumulated depreciation                           (257,434)
                                                            -------------
                                                            $     431,403
                                                            =============

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

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

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


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

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

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

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

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

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

                                      F-11
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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


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

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


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

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


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

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

                                      F-12
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

The following is a summary of options and warrants granted:
<TABLE>
<CAPTION>


                                                         Exercise Price   Weighted Average
                                         Options           Per Share          Fair Value
                                         -------           ---------          ----------

<S>                                      <C>              <C>                <C>
Outstanding January 1, 1997                 --                     --
     Options granted                     520,000
     Options exercised                      --                     --
                                        --------           ------------
Outstanding December 31, 1997            520,000           $       1.00       $104,000
                                                                              ========
     Options granted                      10,000                   4.25
     Options exercised                    (2,200)                  1.00
                                        --------           ------------

Outstanding December 31, 1998            527,800           $1.00 - 4.25       $125,660
                                       =========           ============       ========

</TABLE>

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

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

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

           527,800                                          338,200            189,600
          ========                                         ========           ========
</TABLE>

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

                                       F-13
<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

                                                      Years Ended December 31,
                                                      -------------------------
                                                        1998            1997
                                                       -------        ---------

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


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



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

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

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


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

     Current                               $  473,211          $   483,180
     Deferred                                  20,605              (67,816)
     Pro forma                                     -               107,330
                                           ----------          -----------

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

                                      F-14

<PAGE>


                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


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

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

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

                                                                December 31,
                                                                   1998
                                                                -----------
     Current deferred tax asset                                 $    58,060
     Current deferred tax liability                                      -
                                                                ----------

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

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

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

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

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


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

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

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

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

                                      F-15
<PAGE>



                     ORALABS HOLDING CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

Note 11 - Earnings Per Share
----------------------------

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

                                                             For the Year Ended December 31, 1997
                                                             ------------------------------------
                                                            Income          Shares       Per-Share
                                                          (Numerator)    (Denominator)   ---------
                                                          -----------    -------------
<S>                                                       <C>            <C>            <C>
Net income                                                $1,127,653

Basic EPS
   Weighted average shares issued
     and outstanding                                              -        8,707,362           -
                                                          ----------    ------------
   Income available to common stockholders                $1,127,653       8,707,362    $     .13
                                                          ==========    ============    =========

Effect of dilutive common stock options                                      356,991

Diluted EPS
   Income available to common stockholders plus
    assumed conversions                                   $1,127,653       9,064,353    $     .12
                                                          ==========       =========    =========


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

Net income                                                $  818,559

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

Effect of Dilutive Common Stock
   Options                                                                   359,815

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

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

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


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

Litigation
----------

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

                                      F-16

<PAGE>


                                 EXHIBIT INDEX
                                 -------------


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

23.3          Consent of Independent Public Accounts (Ehrhardt Keefe Steiner &
              Hottman P.C.)

23.4          Consent of Independent Public Accounants (Schumacher & Associates,
              Inc.)

27            Financial Data Schedule for OraLabs Holding Corp. and Consolidated
              Subsidiaires