UNITED STATES
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: March 31, 2000 or
|_| Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from ______________ to _________________
Commission File Number: 000-23039
ORALABS HOLDING CORP.
---------------------
(Exact name of small business issuer as specified in its charter)
Colorado 14-1623047
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2901 South Tejon, Englewood, Colorado 80110
- ------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(303) 783-9499
--------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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.
|X| Yes |_| No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after
the distribution of securities under a plan confirmed by a court.
|_| Yes |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 31, 2000 Issuer had 9,160,755 shares of common stock, $.001 Par
Value, outstanding. Transitional Small Business Disclosure Format (check one)
|_| Yes |X| No
<PAGE>
Table of Contents
-----------------
Part I. Financial Information
Item 1. Financial Statement Page
----
Consolidated Balance Sheets as of March 31, 2000 (Unaudited)
And December 31, 1999......................................... 2
Consolidated Statements of Operations Three Months Ended
March 31, 2000 and 1999 (Unaudited)............................. 3
Consolidated Statement of Stockholders' Equity from
December 31, 1999 Through March 31, 2000 (Unaudited)........... 4
Consolidated Statements of Cash Flows, Three Months Ended
March 31, 2000 and March 31, 1999 (Unaudited)................. 5
Notes to Consolidated Financial Statements...................... 6 - 7
Item 2. Management's Discussion and analysis of Financial Conditions
And Results of Operations.................................... 8-9
Part II. Other Information ............................................. 10-11
Exhibit Index .................................................. 12
<PAGE>
<TABLE>
<CAPTION>
ORALABS HOLDING CORP AND SUBSIDIARIES
Consolidated Balance Sheets
- -----------------------------------------------------------------------------------------------------------
March 31, 2000 December 31, 1999
Unaudited
- -----------------------------------------------------------------------------------------------------------
Assets
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 471,028 $ 646,335
Accounts receivable, net of allowance for doubtful accounts of $88,491
and $71,004, respectively 2,069,683 1,529,831
Shareholder receivable 20,044 11,334
Inventory 1,818,129 1,759,292
Deferred income taxes 134,572 134,572
Prepaid expenses 91,637 124,723
Deposits 182,500 150,000
---------- ----------
Total Current Assets 4,787,593 4,356,087
Property and equipment at cost, net (Note 2) 597,207 549,809
---------- ----------
Total Assets 5,384,800 4,905,896
=======================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 654,615 752,082
Accrued liabilities 366,561 276,965
Reserve for Returns (Note 4) 384,798 324,797
Income taxes payable 74,876 82,985
---------- ----------
Total current liabilities 1,480,850 1,436,829
Deferred tax liability 14,401 14,401
---------- ----------
Total liabilities 1,495,251 1,451,230
---------- ----------
Commitments and contingencies
Stockholders' equity
Preferred stock, $.001 par value, 1,000,000 shares authorized; none
issued and outstanding
Common stock, $.001 par value; 100,000,000 shares authorized, 9,160,755
issued and outstanding at the end of both periods 9,160 9,160
Additional paid-in capital 1,216,905 1,216,905
Retained Earnings 2,663,484 2,228,601
---------- ----------
Total stockholders' equity 3,889,549 3,454,666
---------- ----------
Total liabilities and stockholders' equity $5,384,800 $4,905,896
=======================
- ----------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
2
</TABLE>
<PAGE>
ORALABS HOLDING CORP AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months ended March 31, 2000 and March 31, 1999
Unaudited
- --------------------------------------------------------------------------------
Three Months Ended
03/31/00 03/31/99
- --------------------------------------------------------------------------------
Revenues:
Product sales $3,406,421 $2,065,705
Service income from related party 0 58,458
Cost of Sales 1,797,211 1,163,747
---------- ----------
Gross Profit 1,609,210 960,416
---------- ----------
Operating Expenses:
Engineering 85,841 43,901
Selling and marketing costs 456,628 296,968
General and administrative 368,724 273,357
Other 11,277 38,055
---------- ----------
Total operating expenses 922,470 652,281
---------- ----------
Net Operating Income 686,740 308,135
Other Income (expense)
Interest and other income 5,033 4,228
---------- ----------
Total other income (expense) 5,033 4,228
---------- ----------
Net income before provision for income taxes 691,773 312,363
Provision for income taxes
Current 256,890 85,598
Deferred 20,605
---------- ----------
256,890 106,203
---------- ----------
Net Income $ 434,883 $ 206,160
========== ==========
Basic income per common share $ 0.05 $ 0.02
========== ==========
Weighted average shares outstanding 9,160,755 9,150,498
========== ==========
Diluted income per share $ .05 $ .02
========== ==========
Diluted weighted average shares outstanding 9,558,095 9,332,115
========== ==========
- --------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
ORALABS HOLDING CORP AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
For the three months ended March 31, 2000
Unaudited
- --------------------------------------------------------------------------------------------------------------------
Preferred Stock Common Stock Addl. Paid-In Retained
Shares Amount Shares Amount Capital Earnings Total
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at Dec. 31, 1999 9,160,755 $ 9,160 $1,216,905 $2,228,601 $3,454,666
Net Income 434,883 434,883
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at March 31, 2000 9,160,755 $ 9,160 $1,216,905 $2,663,484 $3,889,549
========== ========== ========== ========== ========== ========== ==========
- --------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORALABS HOLDING CORP AND SUBSIDIARIES
Consolidated Statements of Cash Flow
For the three months ended March 31, 2000 and 1999
Unaudited
- ----------------------------------------------------------------------------------------------
Three Months Ended March 31
2000 1999
- ----------------------------------------------------------------------------------------------
Cash flows from operating activities
- ------------------------------------
<S> <C> <C>
Net Income $434,883 $206,160
-------- --------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation 39,608 28,360
Stock issued for services 27,614
Changes in assets and liabilities:
Accounts Payable -97,467 338,268
Accrued expenses 89,596 -1,278
Reserve for Returns 60,001 8,874
Accounts Receivable -539,852 -299,874
Shareholder Receivable -8,710
Inventory -58,837 -38,361
Income taxes payable -8,109 7,306
Other current assets 33,086 -3,036
-------- --------
Net cash (used in) provided by operating activities -55,801 274,033
-------- --------
Cash from investing activities
Investment in property and equipment -87,006 -70,096
Deposit -32,500
-------- --------
Net Cash (used in) investing activities -119,506 -70,096
-------- --------
Cash flows from financing activities
Stock issued and additional paid-in capital 0 10,000
-------- --------
Net cash (used in) provided by financing activities 0 10,000
-------- --------
Net Increase (decrease) in cash and cash equivalents -175,307 213,937
Cash and cash equivalents, beginning of the period 646,335 348,979
-------- --------
Cash and cash equivalents, end of the period $471,028 $562,916
======== ========
Supplemental disclosures of cash flow information:
Cash paid for income taxes was $265,000 (2000) and $106,293 (1999)
- ------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
5
</TABLE>
<PAGE>
ORALABS HOLDING CORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. This report should, therefore, be read in
conjunction with the Annual Report on Form 10-KSB for the year ended December
31, 1999 (the "1999 Form 10-KSB") of Oralabs Holding Corp. and Subsidiaries (the
"Company").
The information included in this report is unaudited but reflects all
adjustments which, in the opinion of management, are necessary to a fair
statement of the results of the interim periods covered thereby. All adjustments
are of a normal and recurring nature except as described herein.
Note 2 - Property and Equipment
- -------------------------------
Property and equipment consisted of the following:
Machinery and equipment:
- ------------------------
- ---------------------------------------------
March 31, 2000
- ---------------------------------------------
Machinery and equipment $ 846,442
Leasehold Improvements 187,109
-----------
1,033,551
-----------
Less accumulated depreciation (436,344)
-----------
$ 597,207
===========
- ---------------------------------------------
Note 3 - Line-of-Credit
- -----------------------
The Company has a line-of-credit agreement with a bank in the amount of
$750,000, which expires May 2000. Subsequent to March 31, 2000 the line was
renewed in the amount of $1,000,000, which expires May, 2001. The Company had
available the entire line of credit.
Note 4 - Reserve for Returns and Allowances
- -------------------------------------------
The company reserves 3.5% of revenues for returns and allowances of their
product (2% was reserved for the quarter ended March 31, 1999). The reserve is
recorded as a reduction of revenues and as a liability on the balance sheet. The
amount recorded as a liability on the balance sheet at March 31, 2000 and March
31, 1999 is $384,798 and $146,632 respectively.
6
<PAGE>
ORALABS HOLDING CORP AND SUBSIDIARIES
Note 5- Earnings Per Share
- --------------------------
The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share (EPS) computations:
<TABLE>
<CAPTION>
For the Quarter Ended March 31, 2000
- --------------------------------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amt
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income $ 434,883
Basic EPS
Weighted average beginning shares outstanding 9,160,755
---------- ----------
Income available to stockholders $ 434,883 9,160,755 $ .05
=======
Effect of Dilutive Common Stock Options 397,340
Diluted EPS
Income available to common stockholders plus assumed
---------- ---------- -------
Plus assumed conversions $ 434,883 9,558,095 $ .05
========== ========== =======
- --------------------------------------------------------------------------------------------
For the Quarter Ended March 31, 1999
- ---------------------------------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amt
- ---------------------------------------------------------------------------------------------
Net Income $ 206,160
Basic EPS
Weighted average beginning shares outstanding 9,142,419
Weighted average options shares issued 3,407
Weighted average shares issued for services 4,672
---------- ----------
Income available to stockholders $ 206,160 9,150,498 $ .02
=======
Effect of Dilutive Common Stock Options 181,617
Diluted EPS
Income available to common stockholders plus assumed
---------- ---------- -------
Plus assumed conversions $ 206,160 9,332,115 $ .02
========== ========== =======
- --------------------------------------------------------------------------------------------
7
</TABLE>
<PAGE>
ORALABS HOLDING CORP AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Special Note on Forward-Looking Statements
- ------------------------------------------
Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended, provide a safe harbor for certain
forward-looking statements. This quarterly report contains statements that are
forward-looking. Forward looking statements include those which are not
historical facts, including without limitation statements about management's
expectations for any period beyond the fiscal quarter ended March 31, 2000.
Words such as "expect", "anticipate", "believe", "intend" and "estimate" and
similar expressions are examples of words which identify forward looking
statements. While these statements reflect the Company's beliefs as of the date
of this report, they are subject to assumptions, uncertainties and risks that
could cause actual results to differ materially and adversely from the results
contemplated, forecast or estimated in the forward-looking statements included
in this report. These factors include, but are not necessarily limited to, the
impact of competitive products, the acceptance of new products or product lines
in the marketplace, the Company's ability to manage growth, the availability of
an adequate workforce and changes in market conditions.
Results of Operations. For the period ending March 31, 2000 as compared with the
period ending March 31, 1999.
- --------------------------------------------------------------------------------
Product sales increased $1,340,716 or 65%. The increase was substantially due to
lip balm sales to a major mass retail chain to provide the chain with sufficient
product to stock its stores for this sales program. As subsequent sales by the
Company to the chain will be based upon the volume of retail sales the chain
makes to consumers, we do not expect sales to the chain in future quarters to be
at this quarter's level. Also, the Company is responsible for paying placement
fees to the chain in consideration for the chain making checkout counter space
available to the Company. These placement fees are payable during the term of
this sales program without regard to the level of our subsequent sales to the
chain. Placement fees applied in the first quarter were $320,897, with the
balance of $1,138,129 to be accrued throughout the annual program.
Gross profit increased $648,794. As a percentage of sales gross profit increased
from 45% to 47%. This increase can be attributed to lower packaging and direct
labor cost as a result of a higher volume of bulk packaged product verses the
more costly blister carded peg displayed products. Also, our average per piece
selling price was slightly higher. This is not necessarily a trend.
Engineering increased $41,940 to support the increased activity in manufacturing
due to the larger sales volume.
Selling and marketing increased $159,660. Sales and marketing commissions
increased as they related to sales, which increased by $1,340,716.
General and administrative expenses increased approximately $95,367. This
increase can substantially be attributed to increased staffing and board member
compensation.
Net income increased by $228,723 as explained by the above activities.
Liquidity and Capital Resources. Balance Sheet as of March 31, 2000 compared to
December 31, 1999.
- -------------------------------------------------------------------------------
Cash decreased $175,307 substantially as a net effect of the following
activities.
Accounts receivable increased approximately $539,852. The increase is due
primarily to the increase in sales, which was $1,340,716 or 65%.
Inventory increased $58,837 due to a small increase of stock levels to support
higher volume manufacturing requirements. 5HTP, a nutritional supplement,
encompasses $366,381, or 20% of the inventory. Sales of 5HTP in the last three
quarters of 1999 were $25,164, $25,289 and $28,986 respectively. Quarter one,
2000 sales were $31,966. The sales of this product is sufficient enough at this
time to not necessitate a further write down of its inventory evaluation.
8
<PAGE>
Retained earnings increased $434,883 as a result of net income.
Trends. In first quarter of 2000, the Company had a large portion of its sales
to a major mass retail chain to stock its stores for a lip balm checkout lane
program. We do not expect sales to the chain in future quarters to be at this
quarter's level (see "Results of Operations, Product Sales"). On the whole, when
looking at the progress from 1998 to 1999 and into the year 2000, lip balm
continues to show excellent growth. Initial successes with major retailers have
created opportunities to expand product lines.
Lip balm gross revenues grew from $1,078,823 in the first quarter of 1999 to
$2,775,687 in the first quarter of 2000, or a 157% increase. We expect lip balm
products to be the majority of our revenues for this year.
The sour drops and breath fresheners were down, the combined gross revenues were
$923,364 the first quarter of 1999 compared to $595,141 in the first quarter of
2000, or a 36% decrease. Although there was a decline in the first quarter of
2000 we don't anticipate this to be a trend throughout the year.
The nutritional supplements, on a relatively smaller scale, showed significant
growth. Gross revenues were $53,971 in the first quarter of 1999 compared to
$153,890 in the first quarter of 2000, or a 185% increase.
Impact of Inflation. The Company's financial condition has not been affected by
the modest inflation of the recent past. The Company believes that revenues will
not be materially affected by inflation. The Company's lip care and oral care
products are primarily very low retail price points and impulse items. The
nutritional supplements are a small part (4.5% of revenues) in a category that
is on a growth trend and could be negatively impacted by inflation.
Year 2000. Many computer systems were written using two digits rather than four
to define the applicable year. As a result, those computer programs have time
sensitive software that recognizes a date using "00" as the year 1900 rather
than the year 2000. This could cause a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
The Company's cost of becoming year 2000 compliant was not material to the
financial condition of the Company. The Company incurred minor expenses,
primarily for assessment of the year 2000 issue, development of a modification
plan, and the installation of a year 2000 compliant version of its financial,
inventory, and production software. The Company does not anticipate any future
expenditures concerning year 2000 issues to be material.
No material year 2000 problems for the Company have arisen since the end of the
calendar year 1999, and to our knowledge, our suppliers and customers have not
had any year 2000 compliance issues which will affect the Company. The Company
does not believe there will be any material impact on the Company's business
from future year 2000 issues.
9
<PAGE>
PART II - OTHER INFORMATION
Item No. 1. Legal Proceedings. The Company is not a party to any material
pending legal proceedings to which either it or its subsidiary is
a party or of which any of its property is subject except for the
litigation described in Item 3 of Part I of the Company's Form
10-KSB filed for the year ended December 31, 1999.
Item No. 2. Changes in Securities. None.
Item No. 3. Defaults Upon Senior Securities. None.
Item No. 4. Submission of Matters to a Vote of Security Holders. None
Item No. 5. Other Information.
Effective May 1, 2000, the Company entered into an Agreement with
its President, Gary Schlatter, which extended his employment
agreement with the Company for an additional three years, until
April 30, 2003. Mr. Schlatter was paid a bonus of $50,000 and his
base compensation for the three years was set at $295,000 for
year one, $324,500 for year two and $356,950 for year three. In
all other material respects, the existing Amended and Restated
Employment Agreement remained in effect.
Item No. 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required to be filed are listed below: Certain of the following
exhibits are hereby incorporated by reference pursuant to Rule 12(b)-32 as
promulgated under the Securities and Exchange Act of 1934, as amended, from
the reports noted below:
Exhibit
No. Description
--- -----------
4(1) Specimen Certificate for Common Stock
10.1(1) 1997 Stock Plan
10.2(1) 1997 Non-Employee Directors' Option Plan
10.3(2) Amended and Restated Employment Agreement Between the Company's
Subsidiary and Gary Schlatter
10.4(1) Form of Stock Option Grant under 1997 Non-Employee Directors'
Option Plan
10.5(i)(1) Lease Agreement Between the Company's Subsidiary and Gary
Schlatter (September 1, 1995)
10.5(ii)(4) Business Lease Between the Company and 2780 South Raritan, LLC
modified July 1, 1999
10.6(4) Agreement between the Company, Creative Business LLC and Allen
R. Goldstone dated August 24, 1999, as amended
10.7(3) Contract for Services effective April 1, 1998 between OraLabs,
Inc. and Top Form Brands, Inc.
10.8(4) Letter Agreement terminating Contract for Services between
OraLabs, Inc. and Top Form Brands, Inc. dated April 28, 1999
10.9(5) Agreement (effective May 1, 2000 amending the Employment
Agreement listed above as Exhibit 10.3)
11 No statement re: computation of per share earnings is required
since such computation can be clearly determined from the
material contained in this Report on Form 10-QSB
27(5) Financial Data Schedule for OraLabs Holding Corp. and
Consolidated Subsidiaries for three months ended March 31, 2000
and Amended Financial Data Schedule for three months ended
March 31, 1999
- ------------------
(1) Incorporated herein by reference to the Company's Form 10-K filed for
fiscal year 1997.
(2) Incorporated herein by reference to Exhibit B of the Form 8-K filed by the
Company's predecessor, SSI Capital Corp., on May 14, 1997. 3 Incorporated
herein by reference to the Company's Form 10-K filed for fiscal year 1998.
(4) Incorporated herein by reference to the Company's Form 10-K filed for
fiscal year 1998.
(5) Filed herewith.
10
<PAGE>
(b) There were no reports on Form 8-K filed during the quarter reported upon in
this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ORALABS HOLDING CORP.
By: /s/ Gary Schlatter
----------------------
Gary Schlatter, President
By: /s/ Emile Jordan
--------------------
Emile Jordan, Chief Financial Officer
DATED: May 12, 2000
11
<PAGE>
ORALABS HOLDING CORP AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
No. Description
--- -----------
4(1) Specimen Certificate for Common Stock
10.1(1) 1997 Stock Plan
10.2(1) 1997 Non-Employee Directors' Option Plan
10.3(2) Amended and Restated Employment Agreement Between the Company's
Subsidiary and Gary Schlatter
10.4(1) Form of Stock Option Grant under 1997 Non-Employee Directors'
Option Plan
10.5(i)(1) Lease Agreement Between the Company's Subsidiary and Gary
Schlatter (September 1, 1995)
10.5(ii)(4) Business Lease Between the Company and 2780 South Raritan, LLC
modified July 1, 1999
10.6(4) Agreement between the Company, Creative Business LLC and Allen
R. Goldstone dated August 24, 1999, as amended
10.7(3) Contract for Services effective April 1, 1998 between OraLabs,
Inc. and Top Form Brands, Inc.
10.8(4) Letter Agreement terminating Contract for Services between
OraLabs, Inc. and Top Form Brands, Inc. dated April 28, 1999
10.9(5) Agreement (effective May 1, 2000 amending the Employment
Agreement listed above as Exhibit 10.3)
11 No statement re: computation of per share earnings is required
since such computation can be clearly determined from the
material contained in this Report on Form 10-QSB
27(5) Financial Data Schedule for OraLabs Holding Corp. and
Consolidated Subsidiaries for three months ended March 31, 2000
and Amended Financial Data Schedule for three months ended
March 31, 1999
- ------------------
(1) Incorporated herein by reference to the Company's Form 10-K filed for
fiscal year 1997.
(2) Incorporated herein by reference to Exhibit B of the Form 8-K filed by the
Company's predecessor, SSI Capital Corp., on May 14, 1997. 3 Incorporated
herein by reference to the Company's Form 10-K filed for fiscal year 1998.
(4) Incorporated herein by reference to the Company's Form 10-K filed for
fiscal year 1998.
(5) Filed herewith.
12
AGREEMENT
This Agreement is effective as of May 1, 2000, and is by and between
OraLabs, Inc., a Colorado corporation (the "Company") and Gary Schlatter (the
"Employee").
WHEREAS, the parties entered into an Amended and Restated Employment
Agreement dated April 25, 1997 (the "Employment Agreement"); and
WHEREAS, the Employment Agreement expires on April 30, 2000; and
WHEREAS, the parties wish to amend the Employment Agreement as described in
this instrument.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the adequacy and sufficiency of which is acknowledged by
the parties, the parties agree as follows:
1. The Term of the Employment Agreement is hereby extended for three
years, from April 30, 2000 to April 30, 2003.
2. The salary for the Employee's services performed under the
Employment Agreement shall be $295,000 for the year from May 1,
2000 to April 30, 2001, $324,500 for the year from May 1, 2001 to
April 30, 2002, and $356,950 for the year from May 1, 2002 to
April 30, 2003, all of which shall be payable by the company in
equal weekly installments and reduced by applicable withholding
of federal, state and local taxes. In addition to the foregoing,
upon complete execution of this Agreement, the Company shall pay
a $50,000 bonus to the Employee.
3. In addition to the Benefits described in Section 7 of the
Employment Agreement, the Company shall pay the lease and
insurance expense for up to two automobiles used by the Employee
and will reimburse the Employee for his cellular telephone
expenses as well as other telephone related expenses.
4. Except as modified by this Agreement, all provisions of the
Employment Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement on the dates
set forth below.
COMPANY: EMPLOYEE:
ORALABS, INC., a Colorado corporation /s/ Gary H. Schlatter
Gary H. Schlatter
Date:____________________________
By: /s/ Michael I. Friess
- -------------------------
Michael I. Friess, authorized director
Date: May 5, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
<CASH> 471028 562916
<SECURITIES> 0 0
<RECEIVABLES> 2158174 1468927
<ALLOWANCES> 88491 43628
<INVENTORY> 1818129 2000498
<CURRENT-ASSETS> 4787593 4175051
<PP&E> 1033551 758938
<DEPRECIATION> 436344 285799
<TOTAL-ASSETS> 5384800 4648190
<CURRENT-LIABILITIES> 1480850 1515520
<BONDS> 0 0
0 0
0 0
<COMMON> 9160 9160
<OTHER-SE> 3880389 3105569
<TOTAL-LIABILITY-AND-EQUITY> 5384800 4648190
<SALES> 3406421 2065705
<TOTAL-REVENUES> 3411454 2128391
<CGS> 1797211 1163747
<TOTAL-COSTS> 2531680 1816028
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 691773 312363
<INCOME-TAX> 256890 106203
<INCOME-CONTINUING> 434883 206160
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 434883 206160
<EPS-BASIC> .05 .02
<EPS-DILUTED> .05 .02
</TABLE>