<PAGE>


                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB

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

                   For the quarterly period ended July 3, 1999
     [   ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT


                          Commission File Number 0-9478

                           SPECTRUM LABORATORIES, INC.
           Incorporated pursuant to the laws of the State of Delaware
                                                    -----------------

      Internal Revenue Service - Employer Identification Number 95-4718363

              23022 La Cadena Drive, Laguna Hills, California 92653
                     Address of principal executive offices

                    Issuer's Telephone Number (949) 581-3500

 Check whether the issuer (1) filed all reports required to be filed by Section
 13 or 15(d) of the 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
                                      ---   ---

   Number of shares of Common Stock outstanding as of July 31, 1999: 5,311,968


<PAGE>


Spectrum Laboratories, Inc.

<TABLE>
<CAPTION>


                                                                                                  Page
                                                                                                  ----
<S>                                                                                                <C>
Part I  -   FINANCIAL INFORMATION

Item 1.     Financial Statements
            Consolidated Balance Sheet as of July 3, 1999                                           3
            Consolidated Statements of Operations for the Three and Six Months Ended
              July 3, 1999 and July 4, 1998                                                         4
            Consolidated Statements of Cash Flows for the Six Months Ended July 3, 1999
              and July 4, 1998                                                                      5
            Notes to Consolidated Statements                                                        6

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


Part II -   OTHER  INFORMATION

Item 1.     Legal Proceedings                                                                       9
Item 2.     Changes in Securities                                                                   9
Item 3.     Defaults Upon Senior Securities                                                         9
Item 4.     Submission of Matters to a Vote of Security Holders                                     9
Item 5.     Other Information                                                                       9
Item 6.     Exhibits and Reports on Form 8-K                                                        9
Signature                                                                                          10

</TABLE>


                                       2
<PAGE>


Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>

                                                SPECTRUM LABORATORIES, INC.
                                                CONSOLIDATED BALANCE SHEET
                                                    AS OF JULY 3, 1999
                                         (DOLLARS IN THOUSANDS, EXCEPT PAR VALUE)
                                                       (UNAUDITED)
<CAPTION>


      <S>                                                                                       <C>
      ASSETS
      CURRENT ASSETS
           Cash and cash equivalents                                                            $         1,169
           Accounts receivable                                                                            1,653
           Inventories                                                                                    1,714
           Prepaid expenses                                                                                 272
           Deferred taxes                                                                                   377
                                                                                                ----------------

           Total current assets                                                                           5,185

      Equipment and leasehold improvements                                                                2,155
      Goodwill                                                                                            2,616
      Other assets                                                                                          499
                                                                                                ----------------

           TOTAL ASSETS                                                                         $        10,455
                                                                                                ================

      LIABILITIES AND SHAREHOLDERS' EQUITY
      CURRENT LIABILITIES
           Current portion of long-term debt                                                    $           995
           Accounts payable                                                                               1,148
           Accrued expenses and other current liabilities                                                 1,016
                                                                                                ----------------

           Total current liabilities                                                                      3,159

      LONG-TERM DEBT, less current portion                                                                1,200

      MINORITY INTEREST                                                                                   2,000

      SHAREHOLDERS' EQUITY
           Common stock, par value $.01:  25,000,000 shares authorized;
              5,311,968 issued and outstanding                                                               53
           Preferred stock, par value $.01: 10,000,000 shares authorized;
              none issued or outstanding
           Additional paid in capital                                                                     8,036
           Accumulated deficit                                                                           (3,993)
                                                                                                -----------------

      TOTAL SHAREHOLDERS' EQUITY                                                                          4,096
                                                                                                ----------------

      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                $        10,455
                                                                                                ================
</TABLE>


                                       3
<PAGE>

<TABLE>

                                           SPECTRUM LABORATORIES, INC.
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                                   (UNAUDITED)
<CAPTION>

                                                         Three Months Ended                  Six Months Ended
                                                      -------------------------         ---------------------------
                                                         July 3        July 4              July 3         July 4
                                                          1999          1998                1999           1998
                                                      ------------  ------------        ------------   ------------
<S>                                                   <C>           <C>                 <C>            <C>
NET SALES                                             $     3,415   $     2,801         $     6,712    $     6,001

COSTS AND EXPENSES
    Cost of sales                                           1,724         1,518               3,395          3,157
    Selling                                                   450           489                 790            950
    General and administrative                                727           858               1,458          1,647
    Research and development                                  180           224                 343            374
    Other expense, primarily interest                          40            46                  88            125
                                                      ------------  ------------        ------------   ------------

    Total costs and expenses                                3,121         3,135               6,074          6,253

Income (loss) before provision for income taxes               294          (334)                638           (252)

Provision for income taxes                                    114             7                 255             16
                                                      ------------  ------------        ------------   ------------

Net income (loss)                                     $       180   $      (341)        $       383    $      (268)
                                                      ============  ============        ============   ============



Earnings (loss) per share
    Basic                                             $       .03   $      (.07)        $       .07    $      (.06)
                                                      ============  ============        ============   ============
    Diluted                                           $       .03   $      (.07)        $       .07    $      (.06)
                                                      ============  ============        ============   ============

Weighted average shares outstanding
    Basic                                                   5,312         4,815               5,312          4,815
                                                      ============  ============        ============   ============
    Diluted                                                 5,458         4,815               5,458          4,815
                                                      ============  ============        ============   ============

</TABLE>


                                       4
<PAGE>

<TABLE>
                                              SPECTRUM LABORATORIES, INC.
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    SIX MONTHS ENDED JULY 3, 1999 AND JULY 4, 1998
                                                    (IN THOUSANDS)
                                                      (UNAUDITED)
<CAPTION>

                                                                                       1999                   1998
                                                                                 ----------------      ----------------

<S>                                                                              <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                                $           383       $          (268)
Adjustments to reconcile net income to net cash provided by
    operating activities:
Depreciation and amortization                                                                345                   328
Minority interest in loss of subsidiary                                                                            (12)
Change in assets and liabilities:
(Increase) decrease in accounts receivables                                                 (134)                  462
Increase in inventories                                                                      (18)                 (139)
(Increase) decrease in prepaid expenses                                                     (149)                   49
Increase in other assets                                                                     (31)                  (16)
Increase in accounts payable                                                                 381                    92
Increase (decrease) in accrued expenses and other current liabilities                        235                   (22)
Other                                                                                         20                    12
                                                                                 ----------------      ----------------

Net cash provided by operating activities                                                  1,032                   486
                                                                                 ----------------      ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of equipment and leasehold improvements                                        (195)                 (233)
Advances to principal shareholder                                                            (80)                  (30)
Proceeds from the sale of equipment                                                           29
                                                                                 ----------------      ----------------

Net cash used in investing activities                                                       (246)                 (263)
                                                                                 ----------------      ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt                                                                  (472)                 (463)
Proceeds from issuance of debt                                                                                     275
Distributions to principal shareholder                                                                            (350)
                                                                                 ----------------      ----------------

Net cash used in financing activities                                                       (472)                 (538)
                                                                                 ----------------      ----------------


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                         314                  (315)

CASH AND CASH EQUIVALENTS, beginning of period                                               855                 1,135
                                                                                 ----------------      ----------------

CASH AND CASH EQUIVALENTS, end of period                                         $         1,169       $           820
                                                                                 ================      ================

</TABLE>


                                       5
<PAGE>


NOTES TO CONSOLIDATED STATEMENTS

Note 1 - Basis of Presentation

The accompanying unaudited financial statements consolidate the accounts of
Spectrum Laboratories, Inc. and its subsidiaries, SLI Acquisition Corp.,
Spectrum Europe B.V. and Spectrum Chromatography (collectively, the Company).
All significant intercompany transactions have been eliminated in consolidation.
In the opinion of management, the accompanying unaudited interim consolidated
financial statements contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial position of the
Company as of July 3, 1999 and the results of its operations and its cash flows
for the three and six months ended July 3, 1999 and July 4, 1998. Certain
information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to rules and regulations of
the Securities and Exchange Commission, although the Company believes that the
disclosures in the unaudited interim financial statements are adequate to make
the information presented not misleading.

Note 2 - Reorganization

On September 30, 1998, Spectrum Medical Industries, Inc. (SMI), which formerly
owned 79.9% of Spectrum Laboratories, Inc. merged with Spectrum Laboratories,
Inc. (SLI). The merger was a combination of two companies under common control
and has been accounted for in a manner similar to a pooling of interests. The
consolidated financial statements of Spectrum Laboratories, Inc. for the periods
ended July 4, 1998 are those of Spectrum Medical Industries, Inc. and
subsidiaries and have been restated to reflect the effects of the merger with
Spectrum Laboratories, Inc. In connection with this reorganization, SMI
distributed its 79.9% ownership in SLI, 1,013,543 shares, to the stockholders of
SMI and the Company effected a one-for-ten reverse stock split and
reincorporated in Delaware. This reverse stock split has been accounted for as
if it occurred as of the beginning of the earliest period presented in these
consolidated financial statements. Accordingly, stock options and corresponding
exercise prices have been adjusted to reflect the reverse split.

Note 3 - Inventories

Inventories are stated at the lower of cost, determined using the first-in,
first-out method, or net realizable value and are composed of the following (in
thousands):

                   Raw materials                    $     997
                   Work in progress                        51
                   Finished goods                         666
                                                    ----------

                                                    $   1,714
                                                    ==========

Note 4 - Earnings per Share

Basic earnings or loss per share is computed by dividing the net income or loss
attributable to the common stockholders by the weighted average number of common
shares outstanding during the period. There is no adjustment in the net income
or loss attributable to common stockholders. Diluted earnings per share in 1999
reflect the potential dilution that could occur from common shares issuable
through stock options (145,642 and 146,117 shares in the three and six month
periods, respectively). Diluted loss per share in the 1998 periods does not give
effect to issuance of shares through stock options as the effect would be
anti-dilutive.

Note 5 - Income Taxes

At January 2, 1999, the Company had net operating loss carryforwards for federal
income tax purposes available to offset future taxable income. Certain of these
loss carryforwards are available to offset separate taxable income of one of the
companies and are limited to approximately $298,000 of that entity's income
annually. Any unused net operating loss is carried forward. As a result of the
limitation, it is possible that more than $5,000,000 of the entity's net
operating loss may expire without utilization.

The income tax provision for 1998, as a percentage of income before the tax
provision, is lower than expected primarily because SMI, prior to its merger
into the Company, was an S corporation and, hence, paid no federal income taxes
and had a low state income tax rate.


                                       6
<PAGE>


Note 6 - Product Group Information

The Company's product groups are based on specific product characteristics and
are grouped into laboratory products and operating room disposable products.
Laboratory products consist primarily of: (1) membranes used to concentrate,
separate and purify dissolved or suspended molecules that are sold primarily to
laboratories and (2) hollow fiber membrane devices that allow components
retained by a membrane to be concentrated including filters utilized for micro
and ultrafiltration separations that are sold to biotech and pharmaceutical
companies. Operating room disposable products consist of sterile plastic
surgical drapes and cloth bandages that are sold primarily to hospitals.

Revenue by product group is as follows (in thousands):
<TABLE>
<CAPTION>

                                                 Three Months Ended                      Six Months Ended
                                            --------------------------             ----------------------------
                                             July 3,          July 4,               July 3,            July 4,
                                              1999             1998                  1999                1998
                                            ---------        ---------             ---------          ---------
<S>                                         <C>              <C>                   <C>                <C>
Laboratory products                         $  2,940         $  2,415              $  5,814           $  5,184
Operating room disposable products               475              386                   898                817
                                            ---------        ---------             ---------          ---------

                                            $  3,415         $  2,801              $  6,712           $  6,001
                                            =========        =========             =========          =========

</TABLE>

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

The following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes thereto contained elsewhere within this Report on
Form 10-QSB. Except for the historical information contained herein, the
following discussion may contain forward-looking statements that involve risks
and uncertainties. The actual future results of the Company could differ
materially from those discussed here. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed in this report
and those factors discussed in the Company's Form 10-KSB for the year ended
January 2, 1999, as filed with the Securities and Exchange Commission and, from
time to time, in the Company's other reports on file with the Commission.

In September 1998, Spectrum Medical Industries, Inc. (SMI), which formerly owned
approximately 79.9% of the Company, was merged into the Company. As a result,
the operating results of all periods presented include the operations of SMI and
those of Chromatography, which was formerly a subsidiary of SMI and is now a
subsidiary of the Company.

Results of Operations

Sales for the three months ended July 3, 1999 increased 21.9% to $3.4 million
compared to $2.8 million for the same period in 1998. For the six months ended
July 3, 1999, sales increased 11.8% to $6.7 million compared to $6.0 million for
the same period in 1998. Although selling prices were increased between 3% and
5% on certain product groups at the beginning of fiscal 1999, the most
significant reason for product sales growth is attributable to increased demand
for Process Separation, OEM and Hospital Disposable products.

Cost of sales as a percentage of sales was 50.5% for the quarter and 50.6% for
the six months compared to 54.2% for the quarter and 52.6% for the corresponding
six months of 1998. The improvements are attributable to cost reductions made in
the third quarter of 1998, improvements in production efficiency, increased
selling prices, and sales mix of higher margin products.

Selling and general and administrative expenses decreased approximately 13% for
the quarter and six months as compared to the prior year. The decrease was
primarily due to cost reduction measures implemented during the third quarter of
1998.

The income tax provision for 1999 does not include any tax benefits for possible
utilization of net operating loss carryforwards. Such utilization, if later
determined to be obtainable in sufficient amount, may result in a lower
effective tax rate.


                                       7
<PAGE>


Liquidity and Capital Resources

In the first six months of 1999, $1,032,000 of cash was generated from operating
activities. Net income before the non-cash expenses of depreciation and
amortization and an increase in accounts payable were the primary sources of the
positive cash flow. The cash flow was offset, to a large extent, by the purchase
of equipment and payments on debt.

Significant non-operating outflows of cash during the remainder of fiscal 1999
may result from the relocations of the Company's California operations, from
three locations to one. The due date of a bank loan of approximately $275,000
that originally became due on June 1, 1999, was extended to July 1, 2000.

Management of the Company believes that cash on hand and cash expected to be
generated from operations will be sufficient to meet cash requirements for the
remainder of fiscal 1999.


Year 2000 Matters

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
hardware or computer programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the Year 2000. The Company is in
the process of converting from existing hardware and accounting software to
hardware and software programs that are Year 2000 compliant.

The Company has had formal communications with substantially all of its
significant suppliers and large customers to determine the extent to which the
Company's interface systems are vulnerable to those third parties' failure to
remediate their own Year 2000 issue. Although the results of these
communications did not indicate that any problems were expected, there can be no
guarantee that the systems of other companies on which the Company's operations
rely will be timely converted and would not have an adverse effect on the
Company's ability to obtain products and services from vendors or collect
receivables from customers.

The Company will utilize both internal and external resources to reprogram, or
replace, and test the software and equipment for Year 2000 modifications and
anticipates completing these modifications no later than September 1999. The
total cost of the Year 2000 project is estimated at $70,000, is being funded
through operating cash flows, and the costs, except for equipment costs, are
being expensed as incurred. Approximately $40,000 had been expended as of July
3, 1999.

The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived from assumptions of future events, including the continued
availability of certain resources, third-party modification plans and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes and hardware, and
similar uncertainties.

Management is of the opinion that the year 2000 issue will not pose significant
operational problems for the Company. However, should these conversions by the
Company and by its significant suppliers and customers not be successfully
completed on a timely basis, a potential worst-case effect on the Company could
be a significant disruption of operations, including, among other things, an
inability to obtain materials from vendors, make timely shipments to customers,
a temporary inability to process transactions, send invoices to its customers,
or engage in similar normal business activities. The Company does not have a
contingency back-up plan in case such conversions are not completed on a timely
basis.


                                       8
<PAGE>


Part II.  OTHER INFORMATION

Item 1.   Legal Proceedings
          None

Item 2.   Change in Securities
          None

Item 3.   Defaults upon Senior Securities
          Not Applicable

Item 4.   Submission of Matters to a Vote of Security Holders
          None

Item 5.   Other Information
          None

Item 6.   Exhibits and reports on Form 8-K

          (a) Exhibits

              Exhibit 10.21 - First amendment, dated July 14, 999, to the credit
              agreement, dated December 22, 1998, between the Company and City
              National Bank

          (b) The Company filed no reports on Form 8-K during the quarter ended
              July 3, 1999


                                       9
<PAGE>


SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

SPECTRUM LABORATORIES, INC.
(Registrant)




/s/  F. Jesus Martinez
---------------------------
Signature

F. Jesus Martinez
President

Date:  August 2, 1999



 /s/  Larry D. Womack
---------------------------
Signature

Larry D. Womack
Vice President Finance

Date:  August 2, 1999


                                       10