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

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998

                         Commission File Number 0-21703


                         STYLING TECHNOLOGY CORPORATION
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


              DELAWARE                                           75-2665378
    ------------------------------                           -------------------
   (State or Other Jurisdiction of                            (I.R.S. Employer
    Incorporation or Organization)                           Identification No.)


  2390 EAST CAMELBACK ROAD, SUITE 435 
         PHOENIX, ARIZONA                                           85016
----------------------------------------                         ----------
(address of principal executive offices)                         (zip code)


                                 (602) 955-3353
              ----------------------------------------------------
              (registrant's telephone number, including area code)


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

The number of shares of the  issuer's  class of  capital  stock as of the latest
practicable  date, is as follows:  
4,034,703 shares of Common Stock, $.0001 par value, as of May 14, 1998.
-----------------------------------------------------------------------
<PAGE>
                         STYLING TECHNOLOGY CORPORATION
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1998

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

        Condensed Consolidated Balance Sheets -
            December 31, 1997 and March 31, 1998 .........................   3

        Condensed Consolidated Statements of Operations -
            Three Months ended March 31, 1997 and March 31, 1998 .........   4

        Condensed Consolidated Statements of Cash Flows -
            Three months ended March 31, 1997 and March 31, 1998..........   5

        Notes to Condensed Consolidated Financial Statements..............   6

Item 2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations..............................   7

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

Item 1. Legal Proceedings.................................................  12

Item 2. Changes in Securities.............................................  12

Item 3. Defaults Upon Senior Securities...................................  12

Item 4. Submission of Matters to a Vote of Security Holders...............  12

Item 5. Other Information.................................................  12

Item 6. Exhibits and Reports on Form 8-K..................................  12



                                       2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS

                         STYLING TECHNOLOGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 1998 AND DECEMBER 31, 1997

                                                       December 31,   March 31,
                                                          1997          1998
                                                      -----------   -----------
                                     ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                            $ 3,063,000   $ 2,528,000
 Accounts receivable, net of allowance for doubtful
   accounts of $1,032,000 at December 31, 1997 and
   $1,803,000 at March 31, 1998                        14,296,000    15,605,000
 Inventories, net                                      10,951,000    10,604,000
 Prepaid expenses and other current assets              2,120,000     2,268,000
                                                      -----------   -----------
      Total current assets                             30,430,000    31,005,000

PROPERTY AND EQUIPMENT, net                             2,640,000     3,010,000

GOODWILL AND OTHER                                     59,419,000    60,271,000
                                                      -----------   -----------
      Total assets                                    $92,489,000   $94,286,000
                                                      ===========   ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable                                     $ 7,065,000   $ 4,841,000
 Accrued liabilities                                    3,832,000     4,698,000
 Current portion of long-term debt and other            5,647,000     8,228,000
                                                      -----------   -----------
      Total current liabilities                        16,544,000    17,767,000
                                                      -----------   -----------

LONG-TERM DEBT AND OTHER, less current portion         47,377,000    46,462,000
                                                      -----------   -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Preferred stock, $.0001 par value, 1,000,000 shares
  authorized, no shares issued and outstanding                 --            --
 Common stock, $.0001 par value, 10,000,000 shares
  authorized, 4,756,554 shares issued and 3,948,703
  outstanding at December 31, 1997; and 4,034,703
  outstanding at March 31, 1998                             1,000         1,000
 Additional paid-in capital                            27,875,000    27,925,000
 Retained earnings                                      2,492,000     3,931,000
 Treasury stock                                        (1,800,000)   (1,800,000)
                                                      -----------   -----------
      Total stockholders' equity                       28,568,000    30,057,000
                                                      -----------   -----------
      Total liabilities and stockholders' equity      $92,489,000   $94,286,000
                                                      ===========   ===========

              The accompanying notes are an integral part of these
                     condensed consolidated balance sheets.

                                       3
<PAGE>
                         STYLING TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1998


                                                   Three Months     Three Months
                                                      Ended            Ended
                                                     March 31,        March 31,
                                                       1997             1998
                                                    ----------      -----------

NET SALES                                           $7,479,000      $16,225,000

COST OF SALES                                        3,234,000        7,042,000
                                                    ----------      -----------

      Gross profit                                   4,245,000        9,183,000

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                            2,398,000        5,395,000
                                                    ----------      -----------

      Income from operations                         1,847,000        3,788,000

INTEREST EXPENSE AND OTHER, NET                         60,000        1,264,000
                                                    ----------      -----------

      Income before income taxes                     1,787,000        2,524,000

PROVISION FOR INCOME TAXES                             733,000        1,085,000
                                                    ----------      -----------
      Net income                                    $1,054,000      $ 1,439,000
                                                    ==========      ===========
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic                                              3,949,000        3,971,000
                                                    ==========      ===========
  Diluted                                            4,117,000        4,278,000
                                                    ==========      ===========
NET INCOME PER COMMON SHARE:
  Basic                                             $      .27      $       .36
                                                    ==========      ===========
  Diluted                                           $      .26      $       .34
                                                    ==========      ===========


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       4
<PAGE>

                         STYLING TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1998



                                                     Three Months   Three Months
                                                        Ended          Ended
                                                       March 31,      March 31,
                                                         1997           1998
                                                     -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                           $ 1,054,000    $ 1,439,000
 Adjustments to reconcile net income to net
  cash used in Operating activities
   Depreciation and amortization                         252,000        865,000
   Interest accretion on note payable                     43,000         44,000
 Changes in certain assets and liabilities:
   Accounts receivable                                (2,477,000)    (1,309,000)
   Inventory                                            (520,000)       347,000
   Prepaids and other assets                            (432,000)      (448,000)
   Accounts payable and accrued liabilities              356,000     (1,411,000)
                                                     -----------    -----------
Net cash used in operating activities                 (1,724,000)      (473,000)
                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of acquired businesses                      (350,000)            --
   Purchase of property, plant & equipment              (102,000)      (341,000)
   Change in investments, long-term
    receivables & other                                       --       (886,000)
                                                     -----------    -----------
Net cash used in investing activities                   (452,000)    (1,227,000)
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from credit facility, net of                      --      1,940,000
    financing costs
   Exercise of stock options                                  --         50,000
   Repayment of notes payable and credit facility        (22,000)      (825,000)
                                                     -----------    -----------
Net cash provided by (used in) financing
activities                                               (22,000)     1,165,000
                                                     -----------    -----------
DECREASE IN CASH AND CASH EQUIVALENTS                 (2,198,000)      (535,000)

CASH AND CASH EQUIVALENTS, beginning of period         4,492,000      3,063,000
                                                     -----------    -----------

CASH AND CASH EQUIVALENTS, end of period             $ 2,294,000    $ 2,528,000
                                                     ===========    ===========


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       5
<PAGE>
                         STYLING TECHNOLOGY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. BASIS OF PRESENTATION

The  consolidated  financial  statements  included  herein  have  been  prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The statements  presented do not include all information and footnotes  required
to be in conformity with generally accepted  accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring  adjustments)  considered  necessary for a fair presentation
have been included. Results of operations in interim periods are not necessarily
indicative of results for a full year. These consolidated  financial  statements
and  notes  thereto  should  be  read in  conjunction  with  Styling  Technology
Corporation's (the Company) consolidated  financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1997. The  preparation of financial  statements in accordance with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions.  Such  estimates  and  assumptions  affect the reported  amounts of
assets  and  liabilities  as  well  as  disclosure  of  contingent   assets  and
liabilities at the date of the accompanying  consolidated  financial statements,
and the  reported  amounts of the revenues  and  expenses  during the  reporting
periods. Actual results could differ from those estimates.

NOTE 2. INVENTORY

Inventories, net, consist of the following at:

                                              March 31,       December 31,
                                                1998              1997
                                             ----------        ----------
        Raw materials & work-in-process     $ 2,602,000       $ 2,594,000
        Finished goods                        8,002,000         8,357,000
                                            -----------       -----------
                                            $10,604,000       $10,951,000
                                            ===========       ===========

NOTE 3. INTEREST RATE PROTECTION

The  Company's  credit  facility  requires  the  Company to enter  into  certain
interest rate protection  instruments on a portion of its floating rate debt. As
of March 31, 1998,  the Company has entered into interest rate swap and interest
rate cap agreements (the Agreements) to reduce the impact of changes in interest
rates on its floating rate  long-term  debt. The Company is exposed to a risk of
credit loss in the event of  nonperformance  by financial  institutions that are
also party to the Agreements.  However,  management believes that, based on high
creditworthiness  of  these  counterparties,  nonperformance  is  unlikely.  The
following is a summary of the Company's Agreements as of March 31, 1998:

                                       6
<PAGE>
                                      1998
    -------------------------------------------------------------------------
                                Company's                  Notional Value
    Instrument               Effective Rate            (dollars in thousands)
    ----------               --------------            ----------------------
      Swap                       8.50%                        $12,500
      Cap                       10.25%                         12,500
                                                              -------
                                                              $25,000
                                                              -------

NOTE 4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February  1997,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial Accounting Standard No. 128, (SFAS No. 128), EARNINGS PER
SHARE, which supersedes Accounting Principles Board Opinion No. 15. SFAS No. 128
modifies  calculation of primary and fully diluted  earnings per share (EPS) and
replaces  them  with  basic and  diluted  EPS.  SFAS No.  128 is  effective  for
financial  statements  for both  interim  and  annual  periods  presented  after
December 15, 1997, and as a result,  all  prior-period EPS data presented herein
has been restated.

In June 1997, the FASB issued SFAS No. 130, REPORTING COMPREHENSIVE INCOME. SFAS
No. 130 establishes  standards for reporting and display of comprehensive income
and  its   components   (revenues,   gains,   and  losses)  in  a  full  set  of
general-purpose financial statements.  This statement is effective for financial
statement  periods  beginning  after December 15, 1997. The adoption of SFAS No.
130 did not have a  material  impact  on the  Company's  financial  position  or
results of operations.

In June 1997,  the FASB issued SFAS No. 131,  DISCLOSURES  ABOUT  SEGMENTS OF AN
ENTERPRISE AND RELATED  INFORMATION,  which  supersedes  SFAS No. 14,  FINANCIAL
REPORTING  FOR  SEGMENTS  OF A BUSINESS  ENTERPRISE.  SFAS No.  131  establishes
standards for the way that public business  enterprises report information about
operating  segments  in annual  financial  statements  and  requires  that those
enterprises  report selected  information  about  operating  segments in interim
financial  reports issued to  stockholders.  It also  establishes  standards for
related  disclosures  about products and services,  geographic  areas, and major
customers. This statement is effective for financial statement periods beginning
after  December 15, 1997.  However,  SFAS No. 131 need not be applied to interim
financial statements in the initial year of adoption.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS.

INTRODUCTION

Styling  Technology  Corporation (the Company) develops,  produces,  and markets
high-end  professional salon products,  including hair care, nail care, and skin
and body care products as well as salon  appliances and  salonwear.  The Company
sells its products primarily to beauty and tanning supply distributors and, to a
lesser extent, directly to spas, resorts, health and country clubs, beauty salon
chains,  and hair, nail and tanning salons  throughout the United States as well
as in Canada, Europe, Argentina,  Australia, and New Zealand. The Company offers
a diversified line of well-established,  brand-name  professional salon products
that have been popular in the professional salon products industry for more than
10 years.

                                       7
<PAGE>

The Company was founded in June 1995 and  commenced  operations  on November 26,
1996. On that date,  simultaneous  with the  consummation  of an initial  public
offering,  the Company acquired four professional salon products businesses (the
Acquired  Businesses)  that, on a combined  basis,  have a  diversified  line of
well-established, brand-name salon products. In March 1997, the Company acquired
the Utopia line of premium  tanning  products from Creative  Laboratories,  Inc.
Effective June 26, 1997, the Company acquired U.K. ABBA Products, Inc. (ABBA), a
producer  and  marketer  of an  aromatherapy-based  line of hair  products,  for
$20,000,000.  Effective  December 1, 1997, the Company acquired the Clean + Easy
and One Touch (Clean + Easy / One Touch) product lines of Inverness  Corporation
and  Inverness  (UK)  Limited,  consisting  of salon  and  retail  hair  removal
apparatus and products  marketed  under the "Clean + Easy" and "One Touch" brand
names for $20,000,000.

Except for the historical  information  contained herein, the discussion in this
Quarterly Report contains or may contain forward-looking statements that involve
risks and  uncertainties.  The Company's actual results could differ  materially
from those  discussed  here.  Factors  that could  cause or  contribute  to such
differences  include, but are not limited to, those discussed herein, as well as
those factors  discussed under "Special  Considerations"  contained in Item 1 of
the Company's  Annual Report on Form 10-K for the fiscal year ended December 31,
1997. Historical results are not necessarily indicative of operating results for
any future period.

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1998

The Company earned net income of $1.4 million, or $0.34 per share, for the three
months ended March 31, 1998 as compared to net income of $1.1 million,  or $0.26
per share, for the corresponding  period during 1997. The Company attributes the
improvement in net income during the three months ended March 31, 1998 primarily
to the  contributions  of ABBA and Clean + Easy / One Touch,  both of which were
acquired during 1997, as well as to growth in the Company's existing operations.

NET SALES

Net sales  amounted to $16.2  million for the three months ended March 31, 1998,
compared to net sales of $7.5 million for the three months ended March 31, 1997.
The $8.7 million,  or 117%, increase in sales was due primarily to the additions
of ABBA and  Clean + Easy / One  Touch,  acquired  in June and  December,  1997,
respectively.  Sales  growth was also  attributable  to  increased  sales in the
Company's existing brands,  which was in excess of 10% on a consolidated  basis.
In particular,  the Company's Body Drench brand experienced  strong sales growth
as compared to the same period in 1997  primarily  as a result of strong  demand
for the Company's  full line of tanning  products,  which was  introduced in new
packaging  in the  fourth  quarter  of  1997.  The  Company's  ABBA  brand  also
experienced  significant  sales  growth  as  compared  to 1997 due to  favorable
changes in its  exclusive  distribution  network,  which  resulted in a shift to
larger distributors with higher sales volume.

COST OF SALES

Cost of sales amounted to $7.0 million, or 43% as a percentage of net sales, for
the three  months ended March 31, 1998,  compared to $3.2  million,  or 43% as a
percentage  of the net sales,  for the three months  ended March 31, 1997.  As a
result of the foregoing,  the Company realized gross profit for the three months
ended March 31, 1998 of $9.2 million,  or 57%, compared to $4.2 million, or 57%,
realized by the Company during the  corresponding  period in 1997. The Company's
ability to sustain  this  favorable  gross  margin  percentage  is  attributable
primarily to maintaining the cost of goods levels  negotiated  with  third-party

                                       8
<PAGE>

suppliers during 1997. In addition,  gross margins  associated with the ABBA and
Clean + Easy / One Touch brands, after renegotiation of pricing with third-party
manufacturers  at ABBA and cost savings from the shift from domestic to offshore
manufacturing  for the Clean + Easy / One Touch hair  removal  appliances,  were
generally  consistent  with  the  consolidated  gross  margin  of the  Company's
existing brands.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling,  general,  and administrative  expenses were $5.4 million for the three
months ended March 31, 1998  compared to $2.4 million for the three months ended
March 31, 1997. The increase in selling,  general,  and administrative  expenses
was primarily due to expenses added as result of the ABBA and Clean + Easy / One
Touch  acquisitions as well as increased  selling,  general,  and administrative
expenses  incurred to  strengthen  the Company's  infrastructure  to support its
acquisition and growth strategy.  Selling, general, and administrative expenses,
as a percentage of net sales, remained relatively consistent at 33% of net sales
for the three months  ended March 31, 1998  compared to 32% of net sales for the
three  months  ended  March 31,  1997 as the  Company  controlled  increases  in
selling,  general,  and  administrative  expenses  at levels  commensurate  with
increases in sales.

PROVISION FOR INCOME TAXES

The  provision  for  income  taxes for the three  months  ended  March 31,  1998
amounted  to  $1.1   million,   which   represents  an  effective  tax  rate  of
approximately  43%,  compared with a provision of $733,000,  which represents an
effective  tax rate of  approximately  41% for the three  months ended March 31,
1997.  The higher  effective  tax rate for the  quarter  ended March 31, 1998 is
attributable  primarily  to the  income  tax  effect of  goodwill,  which is not
deductible for income tax purposes, associated with the ABBA acquisition.

INCOME FROM OPERATIONS AND EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION &
AMORTIZATION (EBITDA)

Income from  operations  was $3.8  million for the three  months ended March 31,
1998,  compared to $1.8  million  for the three  months  ended  March 31,  1997.
Earnings before interest,  taxes,  depreciation,  and amortization  (EBITDA) was
$4,569,000 for the three months ended March 31, 1998, compared to $2,100,000 for
the three months ended March 31, 1997.  EBITDA is not intended to represent  net
cash  provided  by  operating   activities  as  defined  by  generally  accepted
accounting  principles  and should not be  considered as an  alternative  to net
income as an  indicator  of  operating  performance  or to net cash  provided by
operating activities as a measure of liquidity. The Company believes EBITDA is a
measure  commonly  reported  and widely used by analysts,  investors,  and other
interested  parties  who  monitor  business   performance.   Accordingly,   this
information  has been  disclosed  herein to permit a more  complete  comparative
analysis of the Company's operating performance.

SEASONALITY

The Company has experienced  moderate seasonality in quarterly operating results
due mainly to the effect of the  seasonality of the indoor tanning season on the
operating  result of the Body Drench and  Suntopia  product  lines.  The Company
expects the  seasonal  effect of Body Drench and  Suntopia  sales to lessen over
time as the Company continues to pursue its acquisition strategy.

                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

During the three  months  ended March 31,  1998,  the  Company's  investment  in
accounts  receivable  increased by $1.3  million as a result of a  corresponding
growth in sales for the quarter,  as well as  significant  sales during March in
the Company's  ABBA and Body Drench brands  resulting  from  favorable  customer
responses to promotional programs. The Company also used cash from operations to
achieve a net  reduction  in accounts  payable and accrued  liabilities  of $1.4
million.  The reduction of accounts payable and accrued  liabilities  during the
period relates  primarily to the payment of  liabilities  assumed in the Clean +
Easy / One Touch acquisition as well as related accrued acquisition and offering
costs. As a result of these factors, which offset net income of $1.4 million and
noncash  expenditures  of  $865,000,  the  Company  recorded  net  cash  used in
operations of $473,000 for the quarter ended March 31, 1998.

The Company repaid $825,000 of term loan amortization  under its credit facility
and  utilized  net  proceeds  from its  working  capital  line of credit of $1.9
million during the quarter ended March 31, 1998. As a result,  net cash provided
by financing activities for the quarter amounted to $1.2 million and, along with
cash on hand, was utilized to fund net cash used in investing activities of $1.2
million as well as operating cash requirements as discussed above.

As a result of the foregoing,  the Company's working capital position  decreased
slightly to $13.2  million at March 31, 1998 from $13.9  million at December 31,
1997.

In December  1997, the Company  entered into a seven-year,  $75.0 million senior
credit  facility  (the  Credit  Facility)  with a group of banks for whom Credit
Agricole  Indosuez  acted as agent.  $50.0  million of the Credit  Facility  was
issued  to pay for the  acquisition,  acquisition  fees,  and the  payoff of the
Company's  previous  credit  facility.  The  Credit  Facility  consists  of four
separate  loans:  a $25.0  million  Term Loan A, a $25.0  million Term Loan B, a
$12.5  million  acquisition  term loan,  and a $12.5 million  revolving  line of
credit.  The principal and interest on the Credit Facility is paid quarterly and
the interest rate is determined by the base rate (the "Base Rate") as defined in
the credit  agreement.  The Base Rate is equal to the higher of (i) the  Federal
Funds Rate plus 0.5%, or (ii) the Credit  Agricole  Indosuez prime lending rate.
Term Loan A bears  interest at the Base Rate plus 1.0%,  and matures in December
2002.  Term Loan B bears  interest  at the Base Rate plus 1.5%,  and  matures in
December 2004. The revolving line of credit bears interest at the Base Rate plus
1.0% and expires in December 2002. The revolving line of credit will be used for
working  capital  purposes.  As of  March  31,  1998,  there  was  $2.5  million
outstanding   under  the  revolving  line  of  credit.   The  Company  had,  and
consequently exercised, the option after January 9, 1998 to convert the interest
rates relating to any of the loans to a LIBOR rate. Under this option, Term Loan
A bears interest at the LIBOR rate plus 2.5%;  Term Loan B bears interest at the
LIBOR rate plus 3.0%;  and the  revolving  line of credit bears  interest at the
LIBOR rate plus 2.5%. The Company converted all of Term Loans A and B except the
amount  required as principal  payment for each due March 31, 1998.  The Company
may  utilize  the  acquisition  term  loan in  connection  with  funding  future
acquisitions.

The  Company's  Credit  Facility  requires  the  Company to enter  into  certain
interest rate protection  instruments on a portion of its floating rate debt. As
of March 31, 1998,  the Company has entered into interest rate swap and interest
rate cap  agreements  to reduce the impact of changes in  interest  rates on its
floating rate long-term debt.

                                       10
<PAGE>

The Company's line of credit,  current cash  resources,  and expected cash flows
from  operations  are expected to be sufficient  to fund the  Company's  capital
needs during the next twelve  months at its current level of  operations,  apart
from capital needs  resulting  from  acquisitions.  However,  the Company may be
required to obtain  additional  capital to fund its planned growth.  The Company
plans  to  pursue  strategic  acquisitions  to  capitalize  on  the  substantial
fragmentation and growth potential  existing in the professional  salon products
industry.  The  Company  intends  to fund its  future  capital  needs  through a
combination of current cash resources, expected cash flows from operations, bank
financing, seller notes payable, issuance of common stock, and additional public
or private debt or equity financing.  The availability of such capital resources
cannot be assured and is dependent upon prevailing market  conditions,  interest
rates, and the financial condition of the Company.

YEAR 2000 COMPLIANCE

Many currently  installed  computer  systems and software  products are coded to
accept  only  two-digit  entries in the date code field.  Beginning  in the year
2000,  these  date  code  fields  will  need to  accept  four-digit  entries  to
distinguish  21st century dates from 20th century dates.  As a result,  in fewer
than two years, computer systems and software used by many companies may need to
be  upgraded  to  comply  with  such  "Year  2000"   requirements.   Significant
uncertainty  exists  concerning  the  potential  effects  associated  with  such
compliance. The Company has assessed and continues to assess the impact the Year
2000 issue will have on its  reporting  and  operating  systems.  The Company is
addressing  the  Year  2000  issue  by  upgrading  to a new  release  of its key
operating and financial software system, which will be Year 2000 compliant.  The
Company  will test the new  system for Year 2000  compliance  when the system is
upgraded. In addition,  during 1998 the Company intends to assess the impact any
Year 2000 compliance  problems suffered by its customers,  third-party  contract
manufacturers,  and suppliers may have on the Company. Although the Company does
not  anticipate  that the Year 2000 issue will have a significant  impact on its
business,  any significant  Year 2000 compliance  problem of any of the Company,
its customers, or its third-party contract manufacturers or suppliers could have
a material adverse effect on the Company's business,  financial  condition,  and
results of operations.

                                       11
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        Not applicable.

ITEM 2. CHANGES IN SECURITIES

        Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        Not applicable.

ITEM 5. OTHER INFORMATION

        Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) EXHIBITS.

            11.1 Statement regarding computation of basic earnings per share

            11.2 Statement regarding computation of diluted earnings per share

            27   Financial Data Schedule
----------

          (b)  REPORT ON FORM 8-K.

          Pursuant to an Asset Purchase  Agreement dated as of December 1, 1997,
the Registrant acquired certain assets and liabilities of Inverness Corporation,
as reported on Form 8-K dated  December  10, 1997 and Form 8-K/A dated  February
25, 1998.

                                       12
<PAGE>

                                   SIGNATURES


          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                 STYLING TECHNOLOGY CORPORATION


Dated:    May 14, 1998           By: /s/ Richard R. Ross
                                    -----------------------------------------
                                    Richard R. Ross
                                    Chief Financial Officer, Treasurer, and 
                                    Secretary (Duly authorized officer of the 
                                    registrant, principal financial and 
                                    accounting officer)





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