FORM 10-Q. - QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934


[X] Quarterly  Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934 For the quarterly period ended June 30, 2000

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934


 For the transition period from     to       .
                                       -----  --------


Commission File Number:  1-11586


                                PTI HOLDING INC.
             (Exact name of registrant as specified in its charter)


              Delaware                                 13-3590980
(State or jurisdiction                             (I.R.S. Employer
of incorporation or organization)                  Identification No.)

c/o 15 East North Street, Dover, DE                     19901
(Address of principal executive offices)             (Zip Code)


                                 (302) 678-0855
                (Issuer's Telephone Number, Including Area Code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Sections 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.

 X  Yes                                                             No


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.     Yes                          No


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common  stock,  as of the latest  practicable  date.  As of August 14,  2000,
4,956,352 shares of the issuer's common equity were outstanding.

         The registrant  filed form 10-Q or 10-QSB in all  applicable  preceding
quarters.



                          PART I FINANCIAL INFORMATION



ITEM 1.  Financial Statements.


<TABLE>
 <S>                                                                                                                    <C>
                                                                                                                        Page



Consolidated Balance Sheets as of June 30, 2000 (un-audited) and December 31, 1999                                      12

Consolidated Statements of Operations for the three and six months ended June 30, 2000 and 1999                         13

Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and 1999                                   14

Notes to Consolidated Financial Statements                                                                              16 - 19

</TABLE>


ITEM 2.  Management's Discussion and Analysis


         Statements  in this  Quarterly  Report  on  Form  10-Q  concerning  the
Company's  business outlook or future economic  performance,  or other financial
items,  and plans and objectives  related  thereto,  and  statements  concerning
assumptions   made  or  expectations  as  to  any  future  events,   conditions,
performance or other matters, are  "forward-looking  statements" as that term is
defined  under the  Federal  Securities  Laws.  Forward-looking  statements  are
subject  to risks,  uncertainties  and other  factors  that could  cause  actual
results to differ materially from those stated in such statements.

PTI Holding Inc. (the "Company") was incorporated under the laws of Delaware in
March 1990.

         On March 1, 1994, the Company acquired  Foam-O-Rama,  Inc. ("Foam"),  a
New York  corporation  which was  principally  engaged  in the  business  of the
design,  marketing and sale of bicycle helmets,  by merging it with and into the
company's   wholly-owned   operating   subsidiary,    Protective    Technologies
International  Inc.,  a New  York  corporation  ("PTI"),  pursuant  to a  Merger
Agreement and Plan of Reorganization dated February 14, 1994 among PTI, Foam and
Foam's  shareholders.  From and after  March 2, 1994,  Foam had no  separate  or
independent existence,  having been merged into PTI. For purposes of accounting,
the acquisition has been accounted for as a purchase.

         On August 5, 1997, the Company consummated the merger (the "Merger") of
Flents Products Co., Inc., a New York corporation ("FPC"), which was principally
engaged in the business of the manufacture of wax earplugs and the marketing and
sale of  earplugs  and other  safety and medical  supplies,  such as an eye drop
delivery  system,  styptic  devices,  and  air-filter  masks,  with and into the
Company's  wholly  owned  subsidiary,  Flents  Products  Co.,  Inc.,  a Delaware
corporation  ("Flents"),  pursuant to an Agreement  and Plan of Merger among the
Company,  Flents and FPC. For purpose of accounting,  the  acquisition  has been
accounted  for as a purchase.  Flents  delivered at closing an aggregate  merger
consideration of approximately  $4.8 million.  On October 5, 1998, in accordance
with certain provisions of the Flents  transaction,  an additional 54,846 shares
of the  company's  common  stock were  issued to the  original  shareholders  of
Flents.

         On May 12, 1998, Flents acquired certain assets of the Comfees division
of Magnivision,  a subsidiary of American Greetings Corporation,  for a purchase
price  of  approximately  $1,700,000.  The  Comfees  division  manufactures  and
distributes  contact lens cases,  liquid dispensers,  medicine droppers,  finger
splints and ear protectors, among other health and beauty care items.

       On April 14, 1999, Flents consummated an asset acquisition  ("Karlen") of
Karlen  Manufacturing,  Inc. The Company acquired  substantially  all of the net
operating  assets of  Karlen.  The  purchase  price was  $17,750,000,  excluding
acquisition costs. The Karlen operation,  which is based in Michigan,  is in the
business of manufacturing, marketing and selling personal health and beauty care
items, including some products similar to those sold by Flents.

       The  purchase  price  consisted  of a  $16,750,000  cash  payment  and  a
$1,000,000 promissory note bearing interest at 12% per annum.

     Karlen  Manufacturing  Inc.  had  revenues  in the amount of  approximately
$12,345,000 in 1998. The assets  acquired  include  approximately  $1,585,000 in
accounts  receivables,  $1,800,000  in  inventory  and  $372,000 in property and
equipment. Flents assumed current liabilities of approximately $373,000.

       All agreements  entered into and described  below are dated April 14,1999
unless noted otherwise.

         In  connection  with the Karlen  acquisition,  Flents  entered  into an
Employment Agreement with the chief operating officer of Karlen, to serve as the
President of Flents.  The  Employment  Agreement  has a term of five years.  The
Agreement  provides for  compensation at an annual rate of $165,000 per year. On
the first anniversary of the Agreement and on each subsequent  anniversary,  the
annual rate of salary  shall be  increased  by 5% of the amount of the  previous
annual rate.  The  Agreement  also entitles the Employee to a bonus based on the
Subsidiary's  increase in earnings  before  interest,  taxes,  depreciation  and
amortization.  Additionally,  the  Agreement  grants the  Employee  an option to
purchase an aggregate of 2.0408  shares of common stock of the  Subsidiary.  The
exercise price shall be the value of the Subsidiary on April 14, 1999 multiplied
by 2.0408%.  The option  vests on the fifth  anniversary  of the  Agreement  and
expires nine months after vesting.

       Flents also  entered into a Lease  Agreement.  The lease is for a term of
three years and is at specified rental payments,  which Flents believes are fair
market rates. The lessor is a shareholder of Karlen.

       In addition,  Flents has entered into a  Requirements  Agreement by which
Flents  has  agreed to buy all of its  requirements  of  non-latex  polyurethane
cosmetic  grade  foam,  subject  to the terms of the  Agreement,  from an entity
related to a Karlen shareholder. This raw material is used in the manufacture of
foam  wedges  which  are used in  various  cosmetic  products.  The term of this
agreement  is for three  years  with  purchase  prices  under  the  Requirements
Agreement  approximately equal to the historic purchase prices charged to Karlen
for this critical raw material.

       To finance the Karlen acquisition,  at the Closing, Flents entered into a
$10,000,000  financing  facility pursuant to a Revolving  Credit,  Term Loan and
Security Agreement with a bank. The facility includes a Term loan of $4,000,000,
fully funded at closing,  and a line of credit of $6,000,000 of which at closing
approximately  $2,900,000 was drawn and  approximately  $1,000,000 was available
under the facility's various borrowing limits.  Flents pledged all of its assets
as  security  for this  financing.  The term loan is for  three  years and bears
interest at the bank's base rate plus .75%. The line of credit bears interest at
the bank's base rate plus .25%.

       Flents also  entered  into,  with a  subordinated  lender,  a  Securities
Purchase  Agreement  by which the  lender  advanced  $8,000,000  to  Flents  and
acquired (1) detachable warrants (the "Flents warrants") exercisable to purchase
22 shares of common  stock of  Flents,  par value $.01 per  share,  which  would
constitute  upon  exercise  22% of the issued and  outstanding  common  stock of
Flents  on a  diluted  basis,  and (2) an  $8,000,000  promissory  note  with an
interest  rate of 12%. At June 30,  2000 the  $8,000,000  promissory  note had a
stated  value of  $6,071,549  after  giving  consideration  that the note has an
effective  interest rate of 19.88%.  The Flents  warrants are  exercisable for a
nominal  purchase  price until April 14, 2009.  The  promissory  note is payable
interest only for six years and is due in full at maturity in six years.

       Pursuant to an  Investment  Agreement by and among the Company and two of
the  Company's  officers/directors,  Flents  issued an  aggregate  of 18% of its
common stock of Flents, for consideration of $1,800,000.

       Upon the  exercise of the  warrants,  the Company will own 60% of Flents.
Because  Flents is no longer a wholly owned  subsidiary  of the Company,  Flents
also  entered  into a  Management  Agreement  with  PTI.  Under  the  Management
Agreement,  PTI provides various services to Flents,  including senior executive
services  of the  Chief  Executive  Officer  and the  Chief  Financial  Officer,
information and data processing  functions and services,  management systems and
services,  and senior human resource management functions and services,  such as
payroll, benefits, and related functions.

         Flents also entered into a Shareholders' Agreement by and among Flents,
the Company, the Subordinated lender and the two  officers/directors  owning 18%
of Flents.  The  Shareholders'  Agreement  places  various  restrictions  on the
shareholders,  including restrictions on the transfer of shares of Flents common
stock.

                         Three  Months  ended June 30,  2000 as  compared to the
Three Months ended June 30, 1999

         The Company's net sales were $23,373,331  during the three months ended
June 30,  2000,  an  increase of 7% from net sales of  $21,769,208  for the same
period in 1999.  Sales for PTI were  $18,182,645 for the three months ended June
30, 2000 and  $16,914,859 for the same period in 1999. The increase in sales for
PTI was  attributed  to the initial  placement  of a new product line at a major
customer.  Sales for Flents were  $5,190,686 for the three months ended June 30,
2000 and  $4,854,349  for the same  period in 1999.  The  increase  in sales for
Flents resulted  predominantly  from the acquisition by Flents of Karlen,  which
occurred in April 1999.

         The  cost of  sales  for the  three  months  ended  June  30,  2000 was
$17,685,366  (resulting  in a gross  profit  margin  of  24%),  compared  to the
Company's  cost of sales for the three months ended June 30, 1999 of $16,195,452
(resulting  in a  gross  profit  margin  of  26%).  PTI's  gross  profit  margin
contribution  approximated  18% for the three months ended June 30, 2000 and 19%
for  the  three  months  ended  June  30,  1999.  Flents'  gross  profit  margin
contribution  approximated  47% for the three months ended June 30, 2000 and 49%
for the three months ended June 30, 1999.  The  fluctuation in gross margins for
PTI and Flents was due  primarily  to changes in product mix sales.  PTI's gross
margins for the three months ended June 30, 2000 were also affected by increased
credit  allowances to major  customers over the same period in 1999. The cost of
sales for PTI for the three months ended June 30, 2000 also included  additional
charges for the write off of obsolete  inventories and tooling in the amounts of
$420,000 and $271,000, respectively.

         Selling, general and administrative expenses for the three months ended
June 30, 2000 were $5,781,312  compared to selling,  general and  administrative
expenses  of  $4,226,801  for the three  months  ended June 30,  1999.  Selling,
general and administrative  expenses,  as a percentage of sales were 25% and 19%
for the  quarters  ended June 30,  2000 and 1999,  respectively.  The  increased
selling,  general and  administrative  spending in 2000 was primarily due to the
addition of the operating expenses of Karlen,  which was acquired in April 1999,
higher costs  associated  with the expansion of the  businesses,  licensing fees
associated  with the sales of licensed  products,  the  amortization of goodwill
associated with the acquisitions of Karlen and Comfees,  the depreciation of the
installation of new systems and the higher costs for human  resources.  Selling,
general and  administrative  expenses  for the three  months ended June 30, 2000
also included restructuring charges in the amount of approximately $392,000. The
charges were comprised of $267,000  related to excess  warehouse space and other
costs and $125,000 in employee severance costs.

         Interest expense, net of interest income, for the Company for the three
months ended June 30, 2000 was  $874,313,  compared to net  interest  expense of
$702,497 for the three months ended June 30, 1999.  The increase in net interest
expense from 1999 to 2000 was due  primarily to  financing  increased  inventory
levels  for  the  Company  and  to  the  financing  costs  associated  with  the
acquisition  of Karlen.  Net  interest  expense for Flents was  $498,830 for the
three  months  ended June 30, 2000 and  $430,586 for the three months ended June
30, 1999.

         The Company had a net loss of  ($643,033)  for the three  months  ended
June 30, 2000  compared to the  Company's  net income for the three months ended
June 30, 1999 of $249,562.  The reduction in earnings  resulted  primarily  from
increased selling,  general and administrative  spending and the financing costs
associated  with  the   acquisition  of  Karlen  and  from  increased   goodwill
amortization resulting from the acquisitions.

                           Six Months ended June 30, 2000 as compared to the Six
Months ended June 30, 1999

         The  Company's net sales were  $39,117,054  during the six months ended
June 30,  2000,  an  increase of 3% from net sales of  $37,890,057  for the same
period in 1999. Sales for PTI were $28,602,892 for the six months ended June 30,
2000 and  $30,761,091 for the same period in 1999. The decrease in sales for PTI
was attributed to an overall decline in the purchasing  patterns of customers as
they continue to reduce  inventory  levels.  Sales for the six months ended June
30, 2000 from Flents were  $10,514,162  compared to sales of $9,708,666  for the
same  period in 1999.  The  increase in sales for Flents was  attributed  to the
additional  months of sales from the  acquisition  of Karlen,  which occurred in
April 1999.

                  The cost of sales for the six months  ended June 30,  1999 was
$28,691,899  (resulting  in a gross  profit  margin  of  27%),  compared  to the
Company's  cost of sales for the six months  ended June 30, 1999 of  $27,707,044
(resulting  in a  gross  profit  margin  of  27%).  PTI's  gross  profit  margin
contribution approximated 20% for the six months ended June 30, 2000 and 22% for
the six months ended June 30, 1999.  Flents'  gross profit  margin  contribution
approximated  45% for the six  months  ended  June 30,  2000 and 48% for the six
months ended June 30, 1999. The  fluctuation in gross margins for PTI and Flents
was due  primarily to changes in product mix sales.  PTI's gross margins for the
six months ended June 30, 2000 were also affected by increased credit allowances
to major  customers  over the same period in 1999. The cost of sales for PTI for
the six months  ended June 30,  2000 also  included  additional  charges for the
write off of obsolete  inventories  and  tooling in the amounts of $420,000  and
$271,000, respectively.

         Selling,  general and administrative  expenses for the six months ended
June 30, 2000 were $10,689,281  compared to selling,  general and administrative
expenses of $7,735,170 for the six months ended June 30, 1999. Selling,  general
and administrative  expenses,  as a percentage of sales were 27% and 20% for the
six months ended June 30, 2000 and 1999,  respectively.  The increased  selling,
general  and  administrative  spending  in the  first  six  months  of 2000  was
primarily due to the higher costs  associated  with the expansion of the helmet,
bicycle and bicycle accessory business,  coupled with an increased percentage of
sales of licensed  products,  the  acquisition  of Karlen,  installation  of new
systems  and  the  higher  costs  for  human  resources.  Selling,  general  and
administrative  expenses  for the six months  ended June 30, 2000 also  included
restructuring charges in the amount of approximately  $392,000. The charges were
comprised  of  $267,000  related to excess  warehouse  space and other costs and
$125,000 in employee severance costs.

         The Company had a net loss of  $1,196,975  after the minority  interest
deduction for the 40% outside  ownership in Flents for the six months ended June
30, 2000  compared to the Company's net income for the six months ended June 30,
1999 of $734,624.  The reduction in earnings  resulted  primarily from increased
selling,  general and administrative spending and the financing costs associated
with  the  acquisition  of  Karlen  and  from  increased  goodwill  amortization
resulting from the acquisitions.


Liquidity and Capital Resources

         The  Company's  working  capital  at June 30,  2000 was  $8,826,708  as
compared to $9,733,611 at December 31, 1999.

         The cash flows of the Company have  fluctuated due to the impact of net
income and losses, capital spending, working capital requirements,  the issuance
of common stock and other  financing  activities.  The Company expects that cash
flows in the near  future  will be  primarily  determined  by the  levels of net
income, working capital requirements,  and financings, if any, undertaken by the
Company.  Net cash  increased  (decreased)  by $12,657 and $(412,638) in the six
months ended June 30, 2000 and 1999, respectively.

         Net cash (used in) provided by operating  activities  was  $(3,632,889)
and $4,022,268 in the six months ended June 30, 2000 and 1999, respectively. Net
(loss) income was $(1,196,975) and $734,624 for the same periods, respectively.

         Net  cash  (used  in)   investing   activities   was   $(551,986)   and
$(17,513,678) in the six months ended June 30, 2000 and 1999, respectively.  Net
cash used in investing  activities included payments for acquired businesses and
assets,  payments  primarily for  computers,  manufacturing  equipment and other
capital  expenditures  of $443,674 and $573,287 in these periods,  respectively.
Net cash used in  investing  activities  for the six months  ended June 30, 1999
included  intangible  assets  acquired  pertaining to the Karlen  acquisition of
$14,330,589.

         Net  cash  provided  by  financing   activities   was   $4,197,532  and
$13,078,772 in the six months ended June 30, 2000 and 1999, respectively. During
the six months ended June 30, 2000, and 1999, net borrowings were $5,029,765 and
$11,275,272,  respectively.  The increase in net borrowings was due primarily to
increased inventory levels.

         The Company  pays its  employees  and  vendors on a weekly,  monthly or
bimonthly  basis,  while its customers pay for products on an average of 75 days
after  shipment,  and  therefore the Company has  substantial  needs for working
capital. As of June 30, 2000, the Company had $746,187 of cash available for its
cash needs, compared to cash of $733,530 as of December 31, 1999.

         On April 14, 1999, the Company negotiated new financing agreements with
PNC  Business  Credit.  Under  the  terms of the new  financing  agreement,  PNC
Business  Credit has issued  separate  financing  agreements for PTI and Flents.
Each  company  now  has a  line  of  credit  collateralized  by  such  company's
inventory,  receivables and other assets,  and guaranteed by the Company as well
as a  separate  term  loan.  PTI  has  available  on its  line of  credit  up to
$22,000,000, and has a term loan of $3,000,000; Flents has available on its line
of credit up to $6,000,000 and a term loan of $4,000,000.  Each term loan is for
three years and bears  interest of the bank's base rate plus .75%.  The lines of
credit for each bear  interest at the bank's base rate plus .25%. At the closing
of these  financing  agreements,  the balance owed to Key Bank,  pursuant to the
line of credit with Key Bank, was fully repaid and the Karlen asset  acquisition
was  completed.  At June 30,  2000,  the  balances  of the lines of credit  were
$13,121,487  (PTI)  and  $2,475,296  (Flents),  and the term  loan  balance  was
$5,817,758.  The  availability  on  the  lines  of  credit,  based  on  accounts
receivable  and  inventory   balances  at  June  30,  2000  were   approximately
$14,000,000 and $4,000,000 for PTI and Flents, respectively.  The line of credit
agreements require the Company and each of PTI and Flents to comply with certain
affirmative  covenants,  including  the  maintenance  of a minimum  fixed charge
ratios,  minimum leverage ratios, and minimum net worth amounts,  all as defined
in the agreement. At June 30, 2000, PTI was not in compliance with the net worth
and the fixed charge ratio requirements.  Also, at June 30, 2000, Flents was not
in compliance  with the leverage  ratio.  Both PTI and Flents  are expecting  to
receive waivers through June 30, 2000 from PNC Business Credit of these
covenants.

         Flents also entered  into,  with a  subordinated  lender,  a Securities
Purchase  Agreement  by which the  lender  advanced  $8,000,000  to  Flents  and
acquired (1) detachable warrants (the "Flents warrants") exercisable to purchase
22 shares of common  stock of  Flents,  par value $.01 per  share,  which  would
constitute  upon  exercise  22% of the issued and  outstanding  common  stock of
Flents  on a  diluted  basis,  and (2) an  $8,000,000  promissory  note  with an
interest rate of 12%. The Flents warrants are exercisable for a nominal purchase
price until April 14, 2009. The promissory note is payable interest only for six
years  and is due in full at  maturity  in six  years.  Under  the  terms of the
agreement,  Flents is  required to comply with  certain  affirmative  covenants,
including the  maintenance  of a minimum fixed charge ratios,  minimum  leverage
ratios, and minimum net worth amounts, all as defined in the agreement.  At June
30, 2000,  Flents was not in  compliance  with the leverage  ratio  requirement.
Flents received a waiver through June 30, 2000 from the  subordinated  lender of
this covenant.

         On July  24,  2000,  the  Company's  board  of  directors  approved  an
agreement by which an additional $2,000,000 of equity will be contributed to the
Company  by two of its  officers.  Under  the terms of the  agreement,  Meredith
Birrittella  and Warren  Schaeffer will each agreed to contribute  $1,000,000 in
exchange for 2,173,913  restricted  shares of the Company's common stock.  These
shares do not bear any registration  rights. The price per share as set forth in
the agreement  governing the issuance of the stock was $.46, which represented a
9.2%  discount from the average  closing  price over the two day trading  period
ended  July  25,  2000.  After  the  completion  of  the  equity  infusion,  Mr.
Birrittella and Mr. Schaeffer will own approximately 32% and 25%,  respectively,
of the Company's common stock outstanding.  The transaction is expected to close
on August 15, 2000.

         The  Company's  research and  development  efforts are directed  toward
developing  new  products,   improving   existing   products  and  refining  its
manufacturing  processes.  Such  research  and  development  costs  amounted  to
approximately  $337,000  and $72,000 for the six months  ended June 30, 2000 and
1999,  respectively.  It is expected  that the Company will spend  approximately
$400,000 on research and development during the 2000 year.


Introduction of the Euro

         On January 1,  1999,  eleven of the  fifteen  member  countries  of the
European  Union  established  fixed  conversion  rates  between  their  existing
sovereign  currencies  and a new  currency  called the "Euro".  These  countries
agreed to adopt the Euro as their common legal  currency on that date.  The Euro
trades on currency exchanges and is available for non-cash  transactions.  Until
January 2, 2002, the existing  sovereign  currencies will remain legal tender in
these  countries.  On January  1, 2002,  the Euro is  scheduled  to replace  the
sovereign  legal  currencies of these  countries.  The Company will evaluate the
impact the  implementation  that the Euro will have on its business  operations,
and no assurance can be given that the  implementation of the Euro will not have
a material affect on the Company's  business,  financial position and results of
operational,  and operations,  and cash flows.  In addition,  the Company cannot
accurately  predict the impact the Euro will have on currency  exchange rates or
the Company's currency exchange risk.


Recently Issued Accounting Standards

         In June 1999, the Financial  Accounting Standards Board ("FASB") issued
SFAS  No.137,  Accounting  for  Derivative  Instruments  and Hedging  Activities
Deferral of the Effective Date of FASB  Statement No. 133. The Statement  defers
for one  year  the  effective  date  of  SFAS  No.  133,  Accounting  Derivative
Instruments  and  Hedging  Activities,   which  was  issued  in  June  1998  and
established  accounting and reporting  standards requiring that every derivative
instrument,   including  certain  derivative   instruments   embedded  in  other
contracts,  be  recorded in the  balance  sheet as either an asset or  liability
measured  at its fair  value.  SFAS No. 133 also  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge  accounting  criteria  are met.  SFAS No. 133 will now apply to all fiscal
quarters of all fiscal years beginning after June 2000. Management believes that
the  implementation  of SFAS No. 133 during the third  quarter of year 2000 will
not have a material impact on the Company's results of operations.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial  Statements.
SAB No. 101 provides guidance on the recognition, presentation and disclosure of
revenue in  financial  statements.  The Company has  reviewed  the  bulletin and
believes that its current  revenue  recognition  policy is  consistent  with the
guidance provided in SAB No. 101.


ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.

Market Risks and Sensitivity Analysis

The Company is exposed to various  market risks,  including  changes in interest
rates. The following  analysis presents the hypothetical loss in earnings,  cash
flows  and fair  values  of the  financial  instruments  which  were held by the
Company at June 30, 2000, and are sensitive to the above market risks.

Interest Rate Risks

At June 30, 2000,  the Company had financial  assets  totaling $16.7 million and
financial   liabilities   totaling  $35.2  million.  For  fixed  rate  financial
instruments,  interest  rate  changes  affect the fair  market  value but do not
impact  earnings  or  cash  flows.  Conversely,   for  variable  rate  financial
instruments, interest rate changes generally do not affect the fair market value
but do impact future  earnings and cash flows,  assuming  other factors are held
constant.

At June 30, 2000, the Company had fixed rate financial  assets of $15.7 million.
Holding other variables constant, a ten percent increase in interest rates would
increase  the  unrealized   fair  value  of  the  fixed   financial   assets  by
approximately $1.2 million.

At June 30, 2000,  the Company had fixed rate debt of $14.8 million and variable
rate debt of $20.4  million.  A ten percent  decrease  in  interest  rates would
increase the unrealized fair value of the fixed rate debt by approximately  $2.3
million.

The net  decrease in  earnings  for the next year  resulting  from a ten percent
interest  rate  increase  would be  approximately  $1.6  million,  holding other
variables constant.


                            PART II OTHER INFORMATION


ITEM 1.  Legal Proceedings.

         Certain  product  liability  claims and actions are pending against the
Company.  While the outcome of such claims cannot be determined,  it appears the
Company's product  liability  insurance is adequate to cover any losses that may
arise from such claims.


ITEM 4.  Submission of Matters to a Vote of Security-Holders.

         No matter was submitted during the second quarter of the Company's 2000
fiscal year to a vote of security-holders.


ITEM 6.  Exhibits and Reports on Form 8-K.

         (a)      Exhibits

                  3.1               Registrant's Articles of Incorporation,  as
                                    amended, incorporated by reference to the
                                    like numbered exhibit in the Registrant's
                                    Registration  Statement on Form SB-2 under
                                    the Securities Act of 1933, as amended, File
                                    No. 33-53466

                  3.2               Registrant's   by-laws,    incorporated   by
                                    reference  to the like  numbered  exhibit in
                                    the Registrant's  Registration  Statement on
                                    Form SB-2 under the  Securities Act of 1933,
                                    as amended, File No. 33-53466

                  10.2              Form of Stock Option  granted to  employees,
                                    independent   contractors  and  consultants,
                                    incorporated  by reference to exhibit number
                                    10.14  in  the   Registrant's   Registration
                                    Statement on Form SB-2 under the  Securities
                                    Act of 1933, as amended, File No. 33-53466

                  10.3              Agreement and Plan of Merger dated  February
                                    14,  1994  among   Protective   Technologies
                                    International Inc., Foam-O-Rama, Inc., Ellen
                                    Schaeffer  and Lori  Hillsberg,  as amended,
                                    incorporated  by reference to exhibit number
                                    2 in the Registrant's Current Report on Form
                                    8-K   dated   March  16,   1994   under  the
                                    Securities Exchange Act of 1934, as amended

                  10.4              Non  competition  Agreement  dated  March 1,
                                    1994   between    Protective    Technologies
                                    International  Inc. and Ellen  Schaeffer and
                                    Lori Hillsberg, incorporated by reference to
                                    exhibit  number  99.1  in  the  Registrant's
                                    Current  Report on Form 8-K dated  March 16,
                                    1994 under the  Securities  Exchange  Act of
                                    1934, as amended

                  10.5              Non-competition  Agreement  dated  March  1,
                                    1994   between    Protective    Technologies
                                    International  Inc. and Warren Schaeffer and
                                    Alan Hillsberg, incorporated by reference to
                                    exhibit  number  99.2  in  the  Registrant's
                                    Current  Report on Form 8-K dated  March 16,
                                    1994 under the  Securities  Exchange  Act of
                                    1934, as amended

                  10.6              Form of Promissory Note memorializing  loans
                                    from directors and officers as authorized by
                                    the Board of  Directors  on March 13,  1996,
                                    incorporated  by reference to exhibit number
                                    10.21 in the  Registrant's  Annual Report on
                                    Form  10-KSB for the period  ended  December
                                    31, 1995, under the Securities  Exchange Act
                                    of 1934, as amended

                  10.7              Guarantee  from  Warren  Schaeffer  and Alan
                                    Hillsberg   to    Protective    Technologies
                                    International    Inc.,    incorporated    by
                                    reference  to  exhibit  number  10.21 in the
                                    Registrant's Quarterly Report on Form 10-QSB
                                    for the period  ended  September  30,  1995,
                                    under the  Securities  Exchange Act of 1934,
                                    as amended

                  10.10             Line  of  Credit  Agreement  (Asset  Based),
                                    dated May 6, 1996,  between  Key Bank of New
                                    York, Protective Technologies  International
                                    Inc.,   PTI  Holding  Inc.  and   Protective
                                    Technologies of America Inc., and collateral
                                    loan  documents  thereto,   incorporated  by
                                    reference  to  exhibit  number  10.25 in the
                                    Registrant's Quarterly Report on Form 10-QSB
                                    dated March 31, 1996,  under the  Securities
                                    Exchange Act of 1934, as amended

                    10.13           Merger Agreement and plan of  Reorganization
                                    dated July 25, 1997 among PTI  Holding  Inc.
                                    and Flents  Products Co.,  Inc., as amended,
                                    incorporated by reference to exhibit numbers
                                    1 and 2 in the  Registrant's  Current Report
                                    on Form 8-K date  August 20,  1997 under the
                                    Securities Exchange Act of 1934, as amended.
`
                    10.14           Asset Purchase Agreement dated January 8,
                                    1999, by and among Flents Products Co.,Inc.,
                                    Karlen Manufacturing,  Inc., incorporated by
                                    reference   to  exhibit   number  1  in  the
                                    Registrant's  Current  Report  in  Form  8-K
                                    dated  April 14,  1999 under the  Securities
                                    Exchange Act of 1934, as amended.

                  10.15             Purchase Money Promissory  Note made payable
                                    to Karlen  Manufacturing,  Inc. dated April
                                    14, 1999.  Incorporated by reference to
                                    exhibit number 2 in the Registrant's Current
                                    Report in Form 8-K dated April 14,1999 under
                                    the Securities Exchange Act of 1934, as
                                    amended.

                  10.16             Revolving  Credit,  Term  Loan and  Security
                                    Agreement   dated  April  14,  1999  between
                                    Flents  Products  Co.,  Inc.,  and PNC Bank,
                                    National   Association.    Incorporated   by
                                    reference   to  exhibit   number  3  in  the
                                    Registrant's  Current  Report  in  Form  8-K
                                    dated  April 14,  1999 under the  Securities
                                    Exchange Act of 1934, as amended.

10.17                               Revolving  Credit,  Term  Loan and  Security
                                    Agreement  dated April 14, 1999 by and among
                                    Protective Technologies  International Inc.,
                                    Zacko  Sports  Inc.  and PNC Bank,  National
                                    Association.  Incorporated  by  reference to
                                    exhibit number 4 in the Registrant's Current
                                    Report  in Form 8-K  dated  April  14,  1999
                                    under the  Securities  Exchange Act of 1934,
                                    as amended.

10.18                               Securities  Purchase  Agreement  dated April
                                    14, 1999 between  Flents  Products Co., Inc.
                                    and The 1818 Mezzanine Fund, LP Incorporated
                                    by  reference  to  exhibit  number  5 in the
                                    Registrant's  Current  Report  in  Form  8-K
                                    dated  April 14,  1999 under the  Securities
                                    Exchange Act of 1934, as amended.

10.19                               Investment Agreement dated April 14, 1999 by
                                    and  among  Meredith   Birrittella,   Warren
                                    Schaeffer,  and Flents  Products  Co.,  Inc.
                                    Incorporated  by reference to exhibit number
                                    6 in the Registrant's Current Report in Form
                                    8-K   dated   April  14,   1999   under  the
                                    Securities Exchange Act of 1934, as amended.

10.20                               Management  Agreement  dated  April 14, 1999
                                    between   Flents   Products  Co.,  Inc.  and
                                    Protective  Technologies  International Inc.
                                    Inc.  Incorporated  by  reference to exhibit
                                    number 7 in the Registrant's  Current Report
                                    in Form 8-K dated  April 14,  1999 under the
                                    Securities Exchange Act of 1934, as amended.

10.21                               Shareholder's Agreement dated April 14, 1999
                                    by and among Flents  Products Co., Inc., PTI
                                    Holding Inc., The 1818 Mezzanine Fund, L.P.,
                                    Meredith Birrittella,  and Warren Scheaffer.
                                    Incorporated  by reference to exhibit number
                                    8 in the Registrant's Current Report in Form
                                    8-K   dated   April  14,   1999   under  the
                                    Securities Exchange Act of 1934, as amended.

10.22                               Fairness   Opinion  rendered  by  Management
                                    Planning,   Inc.   dated  April  13,   1999.
                                    Incorporated  by reference to exhibit number
                                    9 in the Registrant's Current Report in Form
                                    8-K   dated   April  14,   1999   under  the
                                    Securities Exchange Act of 1934, as amended.

10.23                               Consent   of   Management   Planning,   Inc.
                                    Incorporated  by reference to exhibit number
                                    10 in the  Registrant's  Current  Report  in
                                    Form 8-K  dated  April  14,  1999  under the
                                    Securities Exchange Act of 1934, as amended

10.24                               Subscription Agreement dated July 24, 2000
                                    among the Registrant, Meredith Birrittella
                                    and Warren Schaeffer



(b) Reports on Form 8-K

The Company did not file any Current Report on Form 8-K during the quarter ended
June 30, 2000.



<PAGE>





                                   SIGNATURES

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


PTI HOLDING INC.



By/s/ Meredith W. Birrittella
    Meredith W. Birrittella,
    Chairman of the Board
    Chief Executive Officer (authorized signatory)




         In accordance with the requirements of the Securities Act of 1933, this
report has been signed by the  following  persons in the  capacities  and on the
dates stated.
<TABLE>

<S>                                                              <C>                                     <C>
/s/ Meredith W. Birrittella                          Chief Executive Officer,                    August 14, 2000
---------------------------
Meredith W. Birrittella                              Chairman and Director



/s/ Anthony Costanzo                                 Chief Financial Officer                     August 14, 2000
---------------------------
Anthony Costanzo                                     Chief Accounting Officer

</TABLE>



<PAGE>

<TABLE>

                        PTI HOLDING INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



<S>                                                                                  <C>                           <C>

ASSETS
                                                                                 June 30, 2000                December 31, 1999
                                                                                  (unaudited)
                                                                                ----------------             ------------------
Current assets:
    Cash and cash equivalents                                                          $ 746,184                   $ 733,530
    Accounts receivable, net of allowance for returns and doubtful
         collections of $863,609 (June 30, 2000) and $515,881 (December 31, 1999)     15,099,153                  10,599,417
    Inventories                                                                       14,919,241                  12,959,906
    Deferred tax asset                                                                   552,559                     322,000
    Prepaid expenses and other current assets                                          2,890,333                   2,270,274

    Total current assets                                                              34,207,470                  26,885,127

Deferred tax asset                                                                        53,085                      90,000
Equipment and improvements, net                                                        2,821,327                   3,226,447
Intangible assets, net                                                                19,513,074                  19,871,196
Other assets                                                                             548,156                     662,265
                                                                                ----------------              -----------------
                                                                                    $ 57,143,112                $ 50,735,035
                                                                                ================              =================


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Loan payable, bank                                                              $ 15,596,783                $ 10,567,018
    Current portion of long term debt                                                  1,800,000                   1,800,000
    Accounts payable and accrued expenses                                              7,947,067                   4,784,498
                                                                                ----------------              -----------------
    Total current liabilities                                                         25,343,850                  17,151,516
                                                                                ----------------              -----------------

Long term debt, net of current portion                                                 4,017,758                   4,849,991

Subordinated note payable                                                              6,071,549                   5,954,841

Commitments and contingencies

Minority interest in subsidiary                                                        4,158,004                   4,029,761

Stockholders' equity:
    Common stock, $.01 par value; authorized 10,000,000 shares, issued
         and outstanding 4,956,352 shares                                                 49,564                      49,564
    Note receivable                                                                      (54,822)                    (54,822)
    Capital in excess of par                                                          16,283,217                  16,283,217
    Retained earnings                                                                  1,273,992                   2,470,967
                                                                                ----------------              ----------------
    Total stockholders' equity                                                        17,551,951                  18,748,926
                                                                                ----------------              ----------------
                                                                                    $ 57,143,112                $ 50,735,035
                                                                                ================              ================


</TABLE>

<PAGE>

<TABLE>


                        PTI HOLDING INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<S>                                                      <C>                    <C>                   <C>                 <C>
                                                   For the Three Months ended June 30,       For the Six Months ended June 30,
                                                  --------------------------------------     ------------------------------------
                                                       2000                    1999                  2000                1999
                                                  ---------------          -------------      --------------       --------------

Net sales                                            $ 23,373,331           $ 21,769,208        $ 39,117,054        $ 37,890,057

Cost of sales                                          17,685,366             16,195,452          28,691,899          27,707,044
                                                    -------------           ------------        ------------        ------------
Gross profit                                            5,687,965              5,573,756          10,425,155          10,183,013
                                                    -------------           ------------        ------------        ------------

Operating expenses :
     Selling, general and administrative expenses       4,375,841              2,979,885           8,268,199           5,578,528
     Restructuring charge                                 391,765                      -             391,765                   -
     Licensing fees                                       560,582                645,678           1,121,229           1,124,379
     Depreciation and amortization                        453,124                601,238             908,088           1,032,263
                                                    -------------           ------------        ------------        ------------
Total operating expenses                                5,781,312              4,226,801          10,689,281           7,735,170
                                                    -------------           ------------        ------------        ------------

Income (loss) from operations                             (93,347)             1,346,955            (264,126)          2,447,843

Interest expense, net                                     874,313                702,497           1,578,515             967,070
                                                    -------------           ------------        ------------        ------------
Income (loss) before income taxes and
   minority interests                                    (967,660)               644,458          (1,842,641)          1,480,773

Income taxes (benefit)                                   (406,417)               270,672            (773,909)            621,925
                                                    -------------           ------------        ------------        ------------

Income (loss) before minority interests                  (561,243)               373,786          (1,068,732)            858,848

Minority interests in subsidiary                          (81,790)              (124,224)           (128,243)           (124,224)

                                                    =============           ============       =============        ============
Net income (loss)                                     $  (643,033)           $   249,562         $(1,196,975)        $   734,624
                                                    =============           ============       =============        ============



Net income (loss) per share of common stock :
   Basic                                                   $ (.13)                $ 0.05              $ (.24)             $  .15
   Diluted                                                   (.13)                  0.05                (.24)                .15

Weighted average shares outstanding :
   Basic                                                4,956,352              4,956,352           4,956,352           4,956,352
   Diluted                                              4,956,352              5,008,291           4,956,352           5,011,760


</TABLE>

<PAGE>


<TABLE>


                        PTI HOLDING INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2000 AND 1999

<S>                                                                                 <C>                  <C>
                                                                                   2000                 1999
                                                                              -----------           ----------


Cash flows from operating activities:
    Net income (loss)                                                         $ 7,071,224            $ 734,624
    Adjustments to reconcile net income (loss) to net cash
     (used in) provided by operating activities:
    Minority interests in income of subsidiary                                    128,243              124,224
    Provision for returns and doubtful accounts                                   347,728              525,000
    Depreciation                                                                  848,794              823,518
    Amortization of intangible assets                                             480,633              216,779
    Amortization of discount on Subordinated note payable                         116,708                    -
    Deferred income tax (benefit)                                                (193,644)            (183,200)
    (Increase) decrease in operating assets and liabilities:
     Accounts receivable                                                       (4,847,464)          (3,153,000)
     Inventories                                                               (1,959,335)           5,123,914
     Prepaid expenses and other current assets                                   (520,149)          (1,454,343)
    Accounts payable and accrued expenses                                       3,162,572              916,153
    Other current liabilities                                                           -              348,599
                                                                              -----------          -----------
    Net cash (used in) provided by operating activities                         4,635,310            4,022,268
                                                                              ===========          ===========


Cash flows from investing activities:
    Cash payments as consideration for purchase of acquired businesses             (8,402)         (16,750,000)
    Loan to stockholders                                                          (99,910)            (190,391)
    Purchase of equipment and improvements                                       (443,674)            (573,287)
                                                                              -----------         ------------
    Net cash used in investing activities                                        (551,986)         (17,513,678)
                                                                              ===========         ============

Cash flows from financing activities:
    Repayment of long term Financing                                             (832,233)                   -
    Borrowings, net                                                             5,029,765           11,275,272
    Repayments of common stock receivable                                               -                3,500
    Minority investment in Subsidiary                                                   -            1,800,000
                                                                              -----------         ------------
    Net cash provided by financing activities                                   4,197,532           13,078,772
                                                                              ===========         ============

Net increase (decrease) in cash and cash equivalents                            8,280,856             (412,638)

Cash and cash equivalents, beginning of period                                    733,530              837,618
                                                                              -----------         ------------
Cash and cash equivalents, end of period                                      $ 9,014,386            $ 424,980
                                                                              ===========         ============

Supplemental disclosures:
    Interest paid                                                             $ 1,520,481          $ 1,024,191
    Income taxes paid                                                                   -              417,325
    Noncash investing and financing activities:
      Fair value of net assets acquired                                                 -            3,419,411
      Promissory note used as partial consideration in the business combination         -            1,000,000
      Excess of purchase price over net assets acquired                                 -           14,330,589
      Accrued liabilities                                                               -              240,231


</TABLE>
<PAGE>




                        PTI HOLDING INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.      Basis of presentation:

        The consolidated financial statements included herein have been prepared
        by the Company,  pursuant to the rules and regulations of the Securities
        and Exchange  Commission.  Certain information and disclosures  normally
        included in financial  statements  prepared in accordance with generally
        accepted  accounting  principles have been condensed or omitted pursuant
        to such rules and regulations.  These unaudited  consolidated  financial
        statements should be read in conjunction with the consolidated financial
        statements and notes thereto  included in the Company's Annual Report on
        Form  10-K for the year  ended  December  31,  1999 and  filed  with the
        Securities and Exchange Commission.

        In the opinion of the Company's management, these unaudited consolidated
        financial  statements  include  all  adjustments,  consisting  solely of
        normal recurring  adjustments,  necessary in order to present fairly the
        Company's  consolidated  financial  position as of June 30, 2000 and the
        results of its  operations  and its cash flows for the six months  ended
        June 30, 2000.  The results of operations  for an interim period are not
        necessarily indicative of the results to be attained in any other fiscal
        period.

        Reclassification:

        For  comparability,  certain 1999 amounts have been  reclassified  where
        appropriate to conform to the financial  statement  presentation used in
        2000.


2. Intangible assets:

        Intangible assets are summarized as follows:
<TABLE>

                    <S>                                               <C>                      <C>

                                                                    6/30/00               12/31/99
                                                                 --------------        ---------------

              Goodwill                                         $     14,485,325      $      14,476,923
              Customer lists                                          5,200,000              5,200,000
              Non-compete agreement                                     500,000                500,000
              Administrative infrastructure                             300,000                300,000
              In-place value of fixed assets                            225,000                225,000
              Exclusive supply contract                                 100,000                100,000
              Trademarks                                                  7,539                  7,539
                                                              -----------------       ----------------
                                                                     20,817,864             20,809,462

              Accumulated amortization                              (1,304,790)              (938,266)
                                                              ----------------        ---------------

                                                              $     19,513,074      $      19,871,196
                                                              ================        ================
</TABLE>


3.      Commitments:

        In  April  2000,  the  Company  entered  into  a 65  month  lease  for a
        warehousing  and  distribution  facility.  The lease  calls for  minimum
        monthly  rentals of $16,000 per month for the first 5 months and $72,054
        per month thereafter through August 31, 2005.

4.      Contingent liabilities:

        Certain claims,  suits and complaints  arising in the ordinary course of
        business  have been filed or are  pending  against the  Company.  In the
        opinion of  management,  all such  matters are without  merit or of such
        kind,  or involve such amounts,  as would not have a material  effect on
        the  financial  position  and  results of  operations  of the Company if
        concluded unfavorably.

        In 1999,  certain  product  liability  claims were asserted  against the
        Company.  While the  outcome of such  claims  cannot be  determined,  it
        appears the Company's product  liability  insurance is adequate to cover
        any losses that may arise from such claims.

5.      Financing arrangements:

        On April 14, 1999, the Company negotiated new financing  agreements with
        PNC Business Credit. Under the terms of the new financing agreement, PNC
        Business  Credit has issued  separate  financing  agreements for PTI and
        Flents   subsidiaries.   Each   company   now  has  a  line  of   credit
        collateralized  by  such  company's  inventory,  receivables  and  other
        assets,  and  guaranteed by the Company as well as a separate term loan.
        PTI has  available  on its line of credit up to  $22,000,000,  and has a
        term loan of  $3,000,000;  Flents has available on its line of credit up
        to $6,000,000 and a term loan of $4,000,000. Each term loan is for three
        years and bears interest at the bank's base rate plus .75%. The lines of
        credit for each bear  interest at the bank's base rate plus .25%. At the
        closing of these  financing  agreements,  the balance  owed to Key Bank,
        pursuant to the line of credit with Key Bank,  was fully  repaid and the
        Karlen asset  acquisition was completed.  At June 30, 2000, the balances
        of the lines of credit were $13,121,487  (PTI) and $2,475,296  (Flents),
        and the term loan balance was $5,817,758.  The availability on the lines
        of credit,  based on accounts  receivable and inventory balances at June
        30,  2000 were  approximately  $14,000,000  and  $4,000,000  for PTI and
        Flents, respectively.  The line of credit agreements require the Company
        and each of PTI and Flents to comply with certain affirmative covenants,
        including  the  maintenance  of a minimum fixed charge  ratios,  minimum
        leverage  ratios,  and minimum net worth amounts,  all as defined in the
        agreement.  At June 30,  2000,  PTI was not in  compliance  with the net
        worth and the fixed charge ratio  requirements.  Also, at June 30, 2000,
        Flents was not in compliance with the leverage ratio  requirement.  Both
        PTI and Flents are expecting to receive waivers through June 30, 2000
        from PNC Business Credit of these covenants.

        Flents also  entered  into,  with a  subordinated  lender,  a Securities
        Purchase Agreement by which the lender advanced $8,000,000 to Flents and
        acquired (1) detachable warrants (the "Flents warrants")  exercisable to
        purchase 22 shares of common stock of Flents,  par value $.01 per share,
        which would  constitute  upon exercise 22% of the issued and outstanding
        common  stock  of  Flents  on a  diluted  basis,  and (2) an  $8,000,000
        promissory  note with an  interest  rate of 12%. At June 30,  2000,  the
        $8,000,000 promissory note had a stated value of $6,071,549 after giving
        consideration  that the note has an effective  interest  rate of 19.88%.
        The Flents warrants are  exercisable for a nominal  purchase price until
        April 14, 2009.  The  promissory  note is payable  interest only for six
        years and is due in full at  maturity  in six years.  Under the terms of
        the  agreement,  Flents is required to comply with  certain  affirmative
        covenants,  including the  maintenance of a minimum fixed charge ratios,
        minimum leverage ratios,  and minimum net worth amounts,  all as defined
        in the agreement.  At June 30, 2000,  Flents was not in compliance  with
        the leverage ratio.  Flents received a waiver through June 30, 2000 from
        the subordinated lender of this covenant.

6.      Segment Information:

        The  Company has two  reportable  segments:  PTI Sports and Flents.  PTI
        Sports and Flents have  separate  management  teams and  infrastructures
        that offer different products.

        The PTI Sports segment  designs,  manufactures  and distributes  bicycle
        helmets, bicycles and bicycle accessories for sale, principally to major
        retailers in the United States and Canada.

        The Flents segment designs,  manufactures and markets earplugs and other
        safety and medical supplies such as an eye drop delivery system, styptic
        devices,  and air  filter  masks.  Customers  include  major  department
        stores, drug chains and supermarket retailers in the United States.

        The accounting  policies of the segments are the same as those described
        in the  summary of the  significant  accounting  policies.  The  Company
        evaluates  performance  based on  operating  earnings of the  respective
        segments. Inter-segment sales are not significant. Inter-segment charges
        for  production,  SG&A,  and interest costs are determined on a pro rata
        basis.

        Two major retail chains accounted for  approximately  47% and 19% of net
        sales for the six months  ended June 30,  2000.  The same two  retailers
        accounted for approximately 47% and 23% of net sales for the same period
        in 1999. As of June 30, 2000, accounts receivable included approximately
        $6,200,000  and $4,400,000  respectively,  due from these two customers.
        The PTI sports segment  reports the sales of the larger of the two major
        customers,  and both  segments  report  the  sales of the  second  major
        customer. Although other major retailers are customers, a loss of one or
        both of these two established  major customers would cause a significant
        loss of sales and affect operating results adversely.

        The following  table  presents  segment  information  for the six months
        ended June 30, 2000 and 1999.

<TABLE>
                    <S>                                     <C>                      <C>            <C>                     <C>
                   2000                                 PTI Sports              Flents             Other                Total
               ---------------                         --------------           ----------     ------------        ----------------

              Net sales                                   $ 28,603,000     $    10,514,000     $       -          $      39,117,000
              Gross profit                                   5,659,000            4,766,000          -                   10,425,000
              Operating earnings                             7,435,000            3,221,000            33,000            10,689,000
              Depreciation and amortization                    312,000              596,000          -                      908,000
              Interest revenue                                  46,000               11,000             1,000                58,000
              Interest expense                                 633,000            1,004,000          -                    1,637,000
              Income tax expense (benefit)                   (993,000)              232,000          (13,000)             (774,000)
              Total assets                                  28,864,000           26,410,000         1,675,000            56,949,000
              Capital expenditures                             447,000              268,000          -                      715,000



                   1999                                   PTI Sports              Flents             Other                Total
               -----------                             -------------            ------------      -----------           -----------
              Net sales                              $      30,761,000     $      7,129,000    $       -          $      37,890,000
              Gross profit                                   6,785,000            3,398,000          -                   10,183,000
              Operating earnings (loss)                      1,351,000            1,141,000          (44,000)             2,448,000
              Depreciation and amortization                    682,000              350,000          -                    1,032,000
              Interest revenue                                  50,000                6,000             1,000                57,000
              Interest expense                                 499,000              525,000          -                    1,024,000
              Income tax expense (benefit)                     379,000              261,000          (18,000)               622,000
              Total assets                                  26,734,000           27,006,000           906,000            54,646,000
              Capital expenditures                             473,000              100,000          -                      573,000

</TABLE>


        Financial information relating to the Company's operations by geographic
area is presented below.

              Net sales                  2000                     1999
                                  ----------------              -------------

              United States      $       37,974,000      $         36,344,000
              Canada                      1,068,000                 1,496,000
              Other                          75,000                    50,000
                                  -----------------             -------------
                                 $       39,117,000      $         37,890,000
                                  =================             =============

        Significantly all of the Company's  long-lived assets are located in the
United States.

7. Subsequent events:

       On July 24, 2000, the Company's board of directors  approved an agreement
       by which an additional  $2,000,000 of equity will be  contributed  to the
       Company by two of its  officers.  Under the terms of the  agreement,  the
       officers  will each  agreed to  contribute  $1,000,000  in  exchange  for
       2,173,913  restricted shares of the Company's common stock.  These shares
       do not bear any registration  rights. The price per share as set forth in
       the  agreement  governing  the  issuance  of the stock  was  $.46,  which
       represented a 9.2%  discount from the average  closing price over the two
       day trading  period  ended July 25,  2000.  After the  completion  of the
       equity infusion,  these officers will own  approximately  32% and 25%, of
       the Company's  common stock  outstanding.  The transaction is expected to
       close on August 15, 2000.