NEWTECH CORP, S-1/A, 1998-07-27

NEWTECH CORP
S-1/A, 1998-07-27
MISCELLANEOUS NONDURABLE GOODS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 1998
REGISTRATION NO. 333-52607
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

AMENDMENT NO. 2

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NEWTECH ELECTRONICS INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
FLORIDA 5190 65-0225504
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

<TABLE>
<S> <C>
JOEL NEWMAN
CHIEF EXECUTIVE OFFICER
NEWTECH ELECTRONICS INDUSTRIES, INC.
16550 N.W. 10TH AVENUE 16550 N.W. 10TH AVENUE
MIAMI, FLORIDA 33169 MIAMI, FLORIDA 33169
(305) 624-0019 (305) 624-0019
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>

---------------
COPIES OF COMMUNICATIONS TO:

<TABLE>
<S> <C>
PAUL BERKOWITZ, ESQ. GEOFFREY E. LIEBMANN, ESQ.
MICHAEL HEIN, ESQ. CAHILL GORDON & REINDEL
GREENBERG TRAURIG HOFFMAN 80 PINE STREET
LIPOFF ROSEN AND QUENTEL, P.A. NEW YORK, NEW YORK 10005
1221 BRICKELL AVENUE (212) 701-3000
MIAMI, FLORIDA 33131 TELECOPY: (212) 269-5420
(305) 579-0500
TELECOPY: (305) 579-0717
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended (the "Securities Act"), check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PRELIMINARY PROSPECTUS Subject to Completion, dated July 27, 1998

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Shares

Newtech Electronics Industries, Inc.

[LOGO]

Common Stock

- --------------------------------------------------------------------------------
Of the shares of Common Stock, par value $0.01 per share (the "Common
Stock"), of Newtech Electronics Industries, Inc., a Florida corporation (the
"Company"), offered hereby (the "Offering"), shares are being offered by
the Company and shares are being offered by certain shareholders of the
Company (the "Selling Shareholders"). See "Selling Shareholders." The Company
will not receive any of the proceeds from the sale of the shares of Common
Stock offered by the Selling Shareholders.

Prior to the Offering, there will be no public market for the Common Stock. It
is currently estimated that the initial public offering price will be between
$ and $ . See "Underwriting" for a discussion of the factors to be
considered in determining the initial public offering price. The Company has
applied for listing of the Common Stock on the Nasdaq National Market under the
symbol "NTCH."

FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE "RISK FACTORS" ON PAGES 7-17.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions(1) Company(2) Shareholders(3)
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<S> <C> <C> <C> <C>
Per Share $ $ $ $
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Total(3) $ $ $ $
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</TABLE>

(1) THE COMPANY AND THE SELLING SHAREHOLDERS HAVE AGREED TO INDEMNIFY THE
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SEE "UNDERWRITING."
(2) BEFORE DEDUCTING EXPENSES OF THE OFFERING, WHICH ARE PAYABLE BY THE
COMPANY, ESTIMATED TO BE $ .
(3) THE SELLING SHAREHOLDERS HAVE GRANTED THE UNDERWRITERS A 30-DAY OPTION TO
PURCHASE UP TO ADDITIONAL SHARES OF COMMON STOCK ON THE SAME TERMS
PER SHARE SOLELY TO COVER OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION IS
EXERCISED IN FULL, THE TOTAL PRICE TO PUBLIC WILL BE $ , THE TOTAL
UNDERWRITING DISCOUNTS AND COMMISSIONS WILL BE $ AND THE TOTAL
PROCEEDS TO SELLING SHAREHOLDERS WILL BE $ . SEE "UNDERWRITING."

The Common Stock is being offered by the Underwriters as set forth under
"Underwriting" herein. It is expected that the delivery of the certificates
therefor will be made at the offices of Warburg Dillon Read LLC, New York, New
York on or about , 1998. The Underwriters include:

Warburg Dillon Read LLC Jefferies & Company, Inc.
<PAGE>

[INSIDE FRONT COVER]

[PHOTOGRAPHS OF PRODUCTS; DIAGRAM WITH NAMES OF PRODUCTS, BRANDS AND CUSTOMERS]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE COVERING
TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING."

2
<PAGE>

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ
IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND THE CONSOLIDATED
FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO (THE "CONSOLIDATED FINANCIAL
STATEMENTS"), APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE
INDICATED, INFORMATION SET FORTH IN THIS PROSPECTUS (I) ASSUMES NO EXERCISE OF
THE UNDERWRITERS' OVER-ALLOTMENT OPTION AND (II) REFLECTS THE MERGER ON APRIL
3, 1998 OF ELECTRONIC INDUSTRIES OF AMERICA, INC. WITH AND INTO THE COMPANY,
WITH THE COMPANY AS THE SURVIVING CORPORATION, AND A SIMULTANEOUS
10,000-FOR-ONE STOCK SPLIT. AS USED HEREIN, THE "COMPANY" MEANS NEWTECH
ELECTRONICS INDUSTRIES, INC., ITS SUBSIDIARIES AND THEIR RESPECTIVE
PREDECESSORS UNLESS THE CONTEXT OTHERWISE REQUIRES.

THE COMPANY

Newtech Electronics Industries, Inc., established in 1990, designs,
sources, manufactures, and markets high-quality, value-priced brand-name
consumer electronic products. The Company offers a broad line of audio, video
and telecommunications products and selected home appliances, including
televisions, video cassette players and recorders ("VCRs"), home audio systems,
compact disc ("CD") players, cassette players, telephones and portable
microwave ovens. The Company's strategy has been to build a portfolio of
licensed and owned brand names, including White-Westinghouse, Admiral, Philco,
Craig and Newtech. By having a portfolio of brand names, the Company is able to
offer retailers proprietary and flexible merchandising programs. The Company
currently sells its products to 15 retailers which operate over 14,000 retail
outlets in the United States and Canada, including mass merchandisers such as
Kmart Corporation ("Kmart") and Wal-Mart Stores, Inc. ("Wal-Mart"), and other
retailers, including Family Dollar Stores, Inc. ("Family Dollar Stores"), Ames
Department Stores, Inc. ("Ames"), Rite-Aid Corporation ("Rite-Aid") and Zellers
Inc. ("Zellers"). In addition, the Company sells its products to customers in
Mexico, the Caribbean and Central and South America. In January 1997, the
Company entered into a long-term strategic alliance with Kmart, pursuant to
which the Company appointed Kmart as the exclusive "discount department store"
to market and sell a range of audio, video and telecommunications products in
the United States under the White-Westinghouse brand name (the
"White-Westinghouse Trademark"). The agreement provides for minimum purchases
by Kmart of a total of $1.1 billion of White-Westinghouse brand consumer
electronic products in specified yearly increments over a seven-and-a-half-year
period. The Company believes that this strategic alliance provides a platform
for significant growth. See "Business--Strategic Alliances." In large part due
to this alliance, from 1996 to 1997, net sales increased 434% to $208.4 million
from $39.1 million. The Company currently sells products to all other U.S.
customers through open purchase orders. The Company plans to grow its business
by expanding its customer base, acquiring and licensing additional brand names,
expanding the territories and product lines available under its existing
licenses, and increasing penetration of existing distribution channels.

THE CONSUMER ELECTRONICS INDUSTRY

The consumer electronics industry is large and diverse, encompassing a
wide variety of technologies and products, including televisions, VCRs, audio
systems, CD players, cassette players and telephones. The Consumer Electronics
Manufacturers Association ("CEMA") estimates that total factory sales to the
U.S. market in 1997 included approximately $8.4 billion of televisions
(including TV/VCR combinations), $2.7 billion of VCRs, $1.7 billion of audio
systems, $4.3 billion of CD players (including portable and home CD players),
$0.3 billion of cassette players and $5.9 billion of telephones and telephone
answering devices. Industry participants have traditionally offered such
merchandise using three principal branding strategies and corresponding price
points: (i) premium brands, such as Sony and Panasonic; (ii) mass-market
brands, such as General Electric ("GE") and Magnavox; and (iii) value-priced
brands, such as White-Westinghouse and GPX.

3
<PAGE>

BUSINESS STRATEGY

The Company plans to establish itself as the leading supplier of high
quality, value-priced consumer electronic products and selected household
appliances. The Company believes that its portfolio of well-recognized brand
names, superior design capabilities, flexible and low-cost sourcing and
manufacturing and responsive after-sales service provide it with competitive
advantages in achieving this goal.

OPERATING STRATEGY. The Company's operating strategy is based on the
following key elements:

/bullet/ OFFER A PORTFOLIO OF WELL-RECOGNIZED BRAND NAMES. The Company
believes that its strategy of offering a portfolio of well-recognized
brand names enables retailers to differentiate themselves in the
marketplace through proprietary and flexible merchandising programs. For
example, the Company's recent strategic alliance with Kmart designates
Kmart as the exclusive "discount department store" to market and sell a
range of audio, video and telecommunications products in the United States
under the White-Westinghouse Trademark.

/bullet/ OFFER HIGH-QUALITY PRODUCTS OF SUPERIOR DESIGN. The Company has
assembled an in-house design and engineering team with significant
industry experience and expertise. The Company believes that the superior
design and style of its products distinguish them from those of its
competitors in the value-priced category and help drive consumer
purchasing decisions. In addition, the Company highlights the design and
style features of its products with detailed descriptions and
illustrations on packaging, which the Company believes further
distinguishes its products from those of its competitors.

/bullet/ MAINTAIN LOW-COST, FLEXIBLE SOURCING AND MANUFACTURING
CAPABILITIES. The Company's products are manufactured both at the
Company's facility in the People's Republic of China (the "PRC") and at
various third-party facilities throughout the world. The Company believes
that its manufacturing facility allows flexibility in sourcing products
and a better understanding of manufacturing cost and time parameters,
which provide the Company with leverage in negotiating with outside
manufacturers.

/bullet/ PROVIDE RESPONSIVE AFTER-SALES SERVICE. The Company believes that
after-sales service is an important competitive factor in the consumer
electronics industry and that its model of responsive after-sales service
is superior to others in the value-priced segment. This model is based on
a toll-free interactive phone system that directs callers to independent
local service centers staffed by in-house and outsourced personnel who
provide basic troubleshooting and advanced technical support, thus
enabling the Company to provide responsive service at a reasonable cost to
the Company.

GROWTH STRATEGY. The Company plans to continue to grow its business using
a strategy comprised of the following principal elements:

/bullet/ EXPAND ITS CUSTOMER BASE. The Company believes that it has
significant opportunities to increase the number of outlets at which its
products are sold. For example, in the second half of 1997, the Company
began selling products to Ames, Bradlees, Inc. ("Bradlees"), Musicland
Stores Corp. ("Musicland") and Heilig Meyers Co. ("Heilig Meyers"). Also,
the Company has recently received its first purchase order from Zellers, a
division of Hudson Bay Company, one of the largest retailers in Canada.
The Company plans to pursue additional proprietary strategic alliances
similar to its arrangement with Kmart, as well as other merchandising
programs.

4
<PAGE>

under the Philco brand name, the Company's first product offering outside
of the consumer electronics industry. In addition, in December 1997, the
Company acquired the Craig trademark, a well-recognized brand name in the
consumer electronics industry, under which the Company sells a broad range
of its audio, video and telecommunications products, as well as portable
microwave ovens. Although the acquisition of additional brand names may
require the expenditure of funds, the Company believes that entering into
new or modified license and distribution agreements will not involve
significant costs.

/bullet/ EXPAND THE SCOPE OF EXISTING BRANDS. The Company plans to continue
to negotiate for the expansion of the territories and product lines under
its existing brand-name licenses. In September 1997, the Company secured
the right to add portable microwave ovens to the consumer electronic
products it sells under the White-Westinghouse Trademark in the United
States and Canada. In addition, in December 1997, the Company expanded its
marketing territory for the Admiral brand name to include Mexico.

/bullet/ INCREASE PENETRATION OF EXISTING DISTRIBUTION CHANNELS. The
Company plans to leverage its customer relationships and success in
broadening product lines and acquiring and licensing additional brand
names to increase product sales to existing customers. The Company
believes that this strategy is responsive to the desire of major retailers
to source products through fewer vendors.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company ....................... shares
Common Stock offered by the Selling Shareholders .......... shares
Common Stock to be outstanding after the Offering ......... shares(1)
Use of proceeds by the Company ............................ The Company intends to apply the net
proceeds of the Offering to repayment
of certain indebtedness, possible future
acquisitions and general corporate
purposes. See "Use of Proceeds."
Proposed Nasdaq National Market symbol .................... NTCH
</TABLE>

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(1) Does not include: (i) shares of Common Stock reserved for
issuance upon exercise of the Underwriters' over-allotment option, (ii) an
aggregate of 649,000 shares of Common Stock reserved for issuance upon
exercise of outstanding options under the Company's 1997 Stock Option Plan
and (iii) an aggregate of 351,000 shares of Common Stock reserved for
issuance upon exercise of options available for grant under the 1997 Stock
Option Plan.

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1995 1996 1997
-------------- -------------- --------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS:
Net sales .............................................. $ 13,353 $ 39,060 $ 208,417
Cost of products sold .................................. 11,993 35,172 186,433
------------ ------------ ------------
Gross profit ........................................... 1,360 3,888 21,984
Selling expenses(1) .................................... 846 1,285 10,533
General and administrative expenses .................... 1,155 1,842 4,598
Write-off of advances to affiliate ..................... -- 980 --
------------ ------------ ------------
Total expenses ......................................... 2,001 4,107 15,131
------------ ------------ ------------
Income (loss) from operations .......................... (641) (219) 6,853
Other (income) expense:
Interest expense ...................................... 307 201 1,763
Interest and other income ............................. (197) (587) (581)
------------ ------------ ------------
Total other (income) expense ........................... 110 (386) 1,182
------------ ------------ ------------
Income (loss) before income taxes ...................... (751) 167 5,671
Income tax benefit ..................................... -- (135) (351)
------------ ------------ ------------
Net income (loss) ...................................... $ (751) $ 302 $ 6,022
============ ============ ============
Net income (loss) per common share
Basic and diluted ..................................... $ (0.08) $ 0.03 $ 0.60
Weighted average number of common shares outstanding
Basic ................................................. 10,000,000 10,000,000 10,000,000
Diluted(2) ............................................ 10,000,000 10,000,000 10,093,024

<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1997 1998
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<S> <C> <C>
STATEMENT OF OPERATIONS:
Net sales .............................................. $ 8,420 $ 38,900
Cost of products sold .................................. 7,210 35,358
------------ ------------
Gross profit ........................................... 1,210 3,542
Selling expenses(1) .................................... 543 1,728
General and administrative expenses .................... 867 1,986
Write-off of advances to affiliate ..................... -- --
------------ ------------
Total expenses ......................................... 1,410 3,714
------------ ------------
Income (loss) from operations .......................... (200) (172)
Other (income) expense:
Interest expense ...................................... 53 735
Interest and other income ............................. (122) (128)
------------ ------------
Total other (income) expense ........................... (69) 607
------------ ------------
Income (loss) before income taxes ...................... (131) (779)
Income tax benefit ..................................... (201) (285)
------------ ------------
Net income (loss) ...................................... $ 70 $ (494)
============ ============
Net income (loss) per common share
Basic and diluted ..................................... $ 0.01 $ (0.05)
Weighted average number of common shares outstanding
Basic ................................................. 10,000,000 10,000,000
Diluted(2) ............................................ 10,000,000 10,309,350
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
--------------------------
PRO FORMA AS
ACTUAL ADJUSTED(3)(4)
---------- ---------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .......... $ 2,210 $
Current assets ..................... 55,468
Total assets ....................... 62,056
Total debt ......................... 33,826
Total shareholders' equity ......... 11,791
</TABLE>
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(1) Selling expenses in 1995, 1996, 1997 and the three months ended March 31,
1998 included freight costs of $49,000, $20,000, $4.5 million and
$124,000, respectively. Approximately $4.3 million of such freight costs
in 1997 were due primarily to the Company's decision to airfreight
products to customers during the 1997 holiday season. The additional
airfreight costs resulted mainly from delays in bringing the Company's PRC
manufacturing facility to required production levels.
(2) Includes the impact of 649,000 shares of Common Stock issuable upon the
exercise of outstanding stock options granted under the Company's 1997
Stock Option Plan. See Note 10 to the Company's Consolidated Financial
Statements included elsewhere in this Prospectus.
(3) Adjusted to reflect the sale of shares of Common Stock offered by
the Company at an assumed public offering price of $ per share and
the application of the estimated net proceeds therefrom as set forth in
"Use of Proceeds."
(4) Gives pro forma effect to (i) the repayment to the Company of an
approximately $271,000 loan to Joel Newman, the Company's Chairman, Chief
Executive Officer and President and 45.0% shareholder, and (ii) the
payment of certain share subscription receivables, consisting of
promissory notes in the aggregate principal amount of $5.0 million issued
to the Company by Windmere Holdings Corporation, a 50.0% shareholder of
the Company, as consideration for the purchase of Common Stock. See
"Capitalization," "Management" and "Certain Transactions." Mr. Newman has
agreed to repay in full the loan with a portion of the net proceeds to him
from the sale of Common Stock in the Offering. With respect to the
promissory notes issued to the Company by Windmere Holdings Corporation,
one such promissory note, in the principal amount of $3.0 million, has
been repaid in full, and Windmere Holdings Corporation has agreed to repay
in full the other promissory note, in the principal amount of $2.0
million, with a portion of the net proceeds to such Selling Shareholder
from the sale of Common Stock in the Offering. See "Use of Proceeds" and
"Principal and Selling Shareholders."

6
<PAGE>

RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, AS WELL AS THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, BEFORE
PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY. THIS PROSPECTUS CONTAINS
CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. THE
COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE RESULTS ANTICIPATED
IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING,
BUT NOT LIMITED TO, THOSE SET FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE
IN THIS PROSPECTUS.

DEPENDENCE ON KMART AGREEMENT

On January 27, 1997, the Company entered into an agreement with Kmart (the
"Kmart Agreement") pursuant to which the Company appointed Kmart as the
exclusive "discount department store" to market and sell a broad range of
audio, video and telecommunications products in the United States under the
White-Westinghouse Trademark licensed to the Company by White Consolidated
Industries, Inc. ("WCI"). See "Business--Brand Portfolio--White-Westinghouse"
and "--Strategic Alliances." During 1997 and the three months ended March 31,
1998, Kmart purchased approximately $158.7 million and $28.9 million,
respectively, of merchandise from the Company pursuant to the Kmart Agreement,
which accounted for approximately 76.0% and 74.0% respectively, of the
Company's net sales. The termination of the Kmart Agreement would, and any
significant modification thereof could, have a material adverse effect on the
Company's business, financial condition and results of operations.

The Kmart Agreement provides for minimum purchases by Kmart which increase
throughout its term (with specified minimums applying to each of the audio,
video and telephone categories) and the payment of penalties for shortfalls. In
the event that aggregate U.S. retail sales in the consumer electronics industry
for any particular category decrease by more than 10% in any year from that
sold in the prior year, Kmart has the right to reduce the minimum purchase
requirements for such category to an amount not less than 80% of the minimum
for such period. There can be no assurance that U.S. retail consumer electronic
sales will not decrease, causing a reduction in Kmart's minimum purchase
requirements.

Kmart further has the right to procure the manufacture of products from
other manufacturers under the White-Westinghouse Trademark on behalf of the
Company, which procurements count towards its minimum purchase requirements. In
such cases, Kmart has the option of paying the purchase price to the
third-party manufacturers directly or making such payment to the Company, in
which case the Company pays the third-party manufacturers. In the event that
Kmart fails to pay a third-party manufacturer, the Company must make the
payment. During 1997 and the three months ended March 31, 1998, Kmart purchased
approximately $79.1 million and $14.7 million, respectively, of merchandise
from third parties under the Kmart Agreement and, pursuant to the Kmart
Agreement, paid the Company a percentage of such amount. Because the Company's
gross profit is higher for the sales of its own products than its gross profit
on third-party manufacturer sales under the Kmart Agreement, an increase in the
percentage of third-party manufacturer sales could lower its overall gross
profit and have a material adverse effect on the Company's business, financial
condition and results of operations.

The initial term of the Kmart Agreement is through June 30, 2004; however,
each of Kmart and the Company have the right, by written notice given prior to
June 30, 2000, to terminate the agreement without cause any time after June 30,
2002. Each of Kmart and the Company further have the right to terminate the
agreement without cause on June 30, 2003 and on each June 30 thereafter; in the
case of the Company, such termination requires 12 months' notice.

Kmart also has the right to terminate the agreement upon the termination
of the January 27, 1997 contract between Kmart and Salton/Maxim Housewares,
Inc. ("Salton") for the sale of kitchen housewares, personal care products,
fans, heaters and electrical air cleaners and humidifiers under the
White-Westinghouse Trademark (the "Salton Agreement"). The termination
provisions of the Salton Agreement are substantially the same as those of the
Kmart Agreement, and the Company has no control over the performance or
termination of the Salton Agreement. In addition, Salton's license agreement
with WCI for the sale of kitchen housewares under the White-Westinghouse
Trademark

7
<PAGE>

expires June 30, 1998, and Salton's license agreement with WCI for the sale of
personal care products, fans, heaters and electrical air cleaners and
humidifiers under the White-Westinghouse Trademark expires December 31, 1998.
Each such license agreement may be extended for 13 one-year periods at the
option of Salton, provided that Salton meets certain minimum sales levels. In
addition, either party may terminate such license agreements without cause on 12
months' notice beginning in 2001. The Company has no control over the
performance or termination of the Salton Agreement with Kmart or Salton's
license agreements with WCI. Furthermore, an adverse decision in the Trademark
Litigation discussed below could result in Salton being limited in further use
of the White-Westinghouse Trademark and in termination or significant
modification of the Salton Agreement. See "--Trademark Litigation." Fifty
percent of Salton's outstanding shares of common stock are owned by Windmere
Holdings Corporation ("Windmere"), a wholly-owned subsidiary of Windmere-Durable
Holdings, Inc. ("Windmere-Durable"). Salton and Windmere-Durable have entered
into an agreement pursuant to which Salton has the right to purchase all of the
shares of Salton common stock held by Windmere. Windmere-Durable has announced
that it has received notice from Salton that Salton intends to exercise such
right and close the purchase on July 27, 1998. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Certain
Relationships." Upon the completion of the Offering, Windmere will own in the
aggregate approximately % of the outstanding shares of the Company's Common
Stock. See "--Control by Principal Shareholders."

Kmart also has the right to terminate the Kmart Agreement on the basis of
any claim which Kmart reasonably believes impairs or would impair Kmart's
ability to receive the benefits of the Kmart Agreement, whether relating to any
or all products. See "--Trademark Litigation." In the Trademark Litigation, CBS
seeks, among other things, a preliminary injunction enjoining the Company,
Salton, Windmere-Durable and WCI from using the White-Westinghouse Trademark in
connection with the sale of certain products, including products in categories
representing 42.0% of the products now being sold by the Company to Kmart under
the Kmart Agreement.

TRADEMARK LITIGATION

In November 1996, WCI filed suit for injunctive relief and damages against
Westinghouse Electric Corporation (now known as CBS Corporation ("CBS")) in the
United States District Court for the Northern District of Ohio alleging that
CBS's grant of licenses to the Westinghouse trademark for use on lighting
products, fans and electrical accessories for use in the home violates WCI's
rights to the Westinghouse trademark and constitutes a breach of the agreements
under which CBS's predecessor sold WCI its appliance business and certain
trademark rights in 1975. In response to that suit, CBS filed a related action
in December 1996 in the United States District Court for the Western District
of Pennsylvania, naming WCI, the Company, Windmere-Durable, Salton and certain
other parties as defendants. The two actions have now been consolidated in the
Pennsylvania court (the "Trademark Litigation"). CBS's complaint alleges among
other things that WCI's license to the Company to use the White-Westinghouse
Trademark on CD players, audio systems that include CD players, VCRs, TV-VCR
combinations, headphones, and telephones, telephone answering machines and
telephone accessories infringes its right to the Westinghouse trademark. CBS
does not appear to be challenging the validity of the Company's license to use
the mark on TVs without VCRs, on radios, on audio systems or cassette tape
players that do not include CD players, on stereo speakers or on microwave
ovens. CBS seeks an injunction prohibiting the Company, Salton and WCI from
using the White-Westinghouse Trademark on products not specifically enumerated
in the transaction documents, and unspecified damages and attorneys' fees. An
adverse decision in the Trademark Litigation could result in the Company being
limited in further use of the White-Westinghouse Trademark and in termination
or significant modification of the Kmart Agreement, any of which would have a
material adverse effect on the Company's business, financial condition and
results of operations.

The legal costs that may be incurred in defending against this action
could be substantial; however, pursuant to an indemnification agreement among
WCI, Kmart and Windmere-Durable, WCI is defending and indemnifying Kmart and
Windmere-Durable for all costs and expenses for claims, damages and losses,
including the costs of litigation, and, pursuant to the license agreements with
WCI, WCI is defending and indemnifying Salton and the Company for all costs and
expenses for claims, damages and losses, including the costs of litigation. In
addition, the litigation could be protracted and result in diversion of
management and other resources of the Company. The Company believes that its
use of the White-Westinghouse Trademark does not infringe upon or otherwise
violate CBS's trademark rights. There can be no assurance that WCI will prevail
in its lawsuit or that WCI, the Company and

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their codefendants will prevail in their opposition to CBS's lawsuit. In the
event that a favorable outcome for the Company is not obtained, the Company
intends to vigorously pursue its rights under the license agreements described
above, including the right to indemnification, although there can be no
assurance that the parties to the license agreements will agree on the scope of
the indemnity.

Related proceedings have also been commenced before the Trademark Trial
and Appeal Board (the "Trademark Board") of the United States Patent and
Trademark Office in opposition to WCI's and CBS's efforts to register certain
uses of the Westinghouse and White-Westinghouse trademarks. Although the
Company is not a party to those proceedings, some of them relate to the
Company's uses of the White-Westinghouse Trademark. Those proceedings have been
stayed pending resolution of the Trademark Litigation in the Pennsylvania
court. Even if the Trademark Litigation is resolved, it is possible that these
proceedings before the Trademark Board will continue and will have a material
adverse effect upon the Company's business, financial condition and results of
operations.

DEPENDENCE ON CERTAIN LICENSE AGREEMENTS

The Company licenses certain brand names under which it markets most of
its products. These licenses are granted pursuant to license agreements which
generally provide for royalty payments based on the value of the goods sold as
well as minimum royalty amounts and sales of trademarked products. In addition,
they are subject to termination or non-renewal at the option of the lessor if
certain minimum sales targets are not met. There can be no assurance that the
Company will meet such minimum royalty or sales targets. The termination or
non-renewal of a license agreement could have a material adverse effect on the
Company's business, financial condition and results of operations.

WHITE-WESTINGHOUSE AND PHILCO. The Company has an exclusive license from
WCI to sell consumer audio, video and telecommunications products in the United
States and Canada under the White-Westinghouse Trademark. The initial term of
the agreement is through December 31, 1998 and may be extended at the Company's
option for up to 14 one-year renewal terms through December 31, 2012. The
Company has an exclusive license from WCI to sell portable microwave ovens in
the United States and Canada under the White-Westinghouse Trademark. The
initial term of the agreement is through December 31, 2003 and may be extended
at the Company's option for up to six two-year renewal terms through December
31, 2015. The Company has an exclusive license from WCI to sell portable
microwave ovens in the United States and Canada under the Philco brand name.
The initial term of the agreement is through December 31, 2003 and may be
extended at the Company's option for up to six two-year renewal terms through
December 31, 2015. WCI may, at its option, terminate each agreement during a
renewal term if certain minimum sales targets are not met. See "Business--Brand
Portfolio--White-Westinghouse" and "Business--Brand Portfolio--Philco."

CERTAIN FORWARD LOOKING INFORMATION AND INACCURATE ESTIMATES OF REVENUE AND NET
INCOME

A March 1998 article in THE MIAMI HERALD reported that the Company's
Chairman, Chief Executive Officer and President was "comfortable with
estimates" of the Company's revenue and net income for 1998 of $350 million and
$10.9 million, respectively. These estimates were confirmed by Mr. Newman in
error, insofar as the Company did not intend to offer any of its securities on
the basis thereof and is not offering the Common Stock offered hereby on such
basis. Although this information may reflect Mr. Newman's belief at the time
such estimates were confirmed, the Company now believes that such estimates
exceed anticipated results. Therefore, such estimates should not be taken as
indicative of the Company's forecasts at any other time, including as of the
date of this Prospectus. The Company does not intend to update these estimates.
POTENTIAL INVESTORS ARE EXPRESSLY CAUTIONED NOT TO RELY ON THESE ESTIMATES IN
MAKING THEIR INVESTMENT

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DECISION. IN ADDITION, SUCH ESTIMATES ARE FORWARD-LOOKING INFORMATION AND AS
SUCH ARE INHERENTLY SUBJECT TO RISK AND UNCERTAINTY. Important factors that
could cause the Company's actual results to differ materially and adversely
from the projected revenue and income levels include each of those discussed
elsewhere within this "Risk Factors" section, as well as a failure by the
Company to implement successfully any aspect of its operating or growth
strategies during the applicable time periods. See "Business--Strategy."

INVENTORY MANAGEMENT RISKS

The Company is subject to significant risks in connection with its
inventory management. In order to assure an adequate supply of products to meet
the relatively high demand during the third and fourth quarters of each year,
the Company must commit to acquire products six to nine months in advance of
delivery. If the Company underestimates its need for inventory or experiences
delays in production, the Company may have to operate its plant on a more
expensive overtime basis, pay a significant premium to obtain the necessary
contract-manufacturing capacity or ship products by air rather than less
expensive ground or sea transportation in order to meet customer orders. In
such event, profit margins, sales and/or customer relationships could be
materially adversely affected. For example, in 1997, the Company incurred
approximately $4.3 million of freight costs due primarily to the Company's
decision to airfreight products to customers during the 1997 holiday season.
Such additional airfreight costs resulted mainly from delays in bringing the
Company's PRC manufacturing facility to required production levels. See
"--Risks Associated with New Manufacturing Operations." Similarly, if the
Company overestimates its inventory needs, the Company will be required to
reduce prices in order to dispose of such inventory or increase borrowings to
finance the carrying costs of such inventory, thereby adversely affecting its
profitability and cash flows. There can be no assurance that the Company will
be able to borrow such amounts on reasonable terms, if at all. To the extent
that the Company is unable to adequately plan, time, and budget its sourcing
and manufacturing operations, incurs delays in delivery, fails to adequately
forecast prices and demand or reduce costs when necessary, a material adverse
effect on the Company's business, financial condition and results of operations
could result. See "--Seasonality and Fluctuations in Quarterly Performance" and
"Business--Sourcing and Manufacturing."

RISK OF PRODUCT RETURNS AND WARRANTY CLAIMS

The Company incurs expenses as a result of product returns and warranty
claims. Such returns and warranty claims may result from defective goods,
inadequate performance relative to customer expectations, improper packaging,
liberal retailer return policies and other causes which may be outside the
Company's control. During the three years ended December 31, 1995, 1996 and
1997 and the three months ended March 31, 1998, product returns and warranty
claims were approximately 3.8%, 0.8%, 1.6% and 2.3%, respectively, of gross
sales. In 1995, 1996, 1997 and the three months ended March 31, 1998,
approximately 97.0%, 83.0%, 75.0% and 73.0%, respectively, of the Company's
gross sales were made under net sale arrangements, whereby the Company's
customers are responsible for product returns, which cannot be returned to the
Company. While the Company plans to maintain or increase the percentage of
sales that are on a net basis, there can be no assurance that the Company will
be successful in maintaining or increasing such percentage. Any significant
increase in product returns and warranty claims could have a material adverse
effect on the Company's business, financial condition and results of
operations.

LIMITED DISTRIBUTION CHANNELS AND CONCENTRATION OF CUSTOMERS AND CREDIT RISK

The Company has been, and is, highly dependent upon its largest customers
and has derived, and is expected to derive, a substantial percentage of its
revenues from such customers. In particular, the Company's largest customer,
Kmart, accounted for approximately 76.0% and 74.0% of the Company's net sales
during 1997 and the three months ended March 31, 1998, respectively, and in
1996 net sales to each of the following customers represented more than 10% of
the Company's net sales: (i) Kmart represented 37%, (ii) Wal-Mart represented
34%, (iii) Sanyo do Brasil represented 12%, and (iv) Family Dollar Stores
represented 11%. The Company's top five customers accounted for approximately
95%, 90.0% and 85.8% of net sales during 1996, 1997 and the three months ended
March 31, 1998,

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respectively. Although certain of the Company's customers have posted standby
letters of credit which may be drawn upon by the Company in the event of
payment default, such letters of credit may not be sufficient to reimburse the
Company fully for all outstanding invoices. The loss of any one of the
Company's largest customers or the failure of any one of such customers to pay
on a timely basis could have a material adverse effect on the Company's
business, financial condition and results of operations. See
"Business--Customers."

SUBSTANTIAL COMPETITION

The consumer electronics industry is extremely competitive and is
dominated by large and well-capitalized companies. The Company competes with
the entire consumer electronics industry for consumer dollars, shelf space for
products and sales support. The Company's competitors may not need to rely on
external financing or relationships with independent manufacturers to the same
extent as the Company. Furthermore, the Company's competitors may experience
cost advantages depending on labor costs, currency exchange rates and other
factors in the countries in which their manufacturing operations are located,
relative to the countries in which the Company's products are manufactured. The
Company has adopted a marketing strategy that targets the value-priced segment
of the consumer electronics market, which is particularly price sensitive.
There is competition among a number of brands in this market segment, including
Emerson and GPX. In addition, although Magnavox, GE, Sony and Panasonic brand
products are not currently emphasized in the value-priced segment of the
market, they do compete with the Company's products for consumer dollars, shelf
space and sales support. To the extent that these brands compete directly with
the Company's brands on the basis of price, or their product prices were
otherwise reduced, the Company's ability to market and sell competitive
products could be severely affected, which would have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Business--Strategy," "--Customers," and "--Competition."

DEPENDENCE ON KEY INDIVIDUALS

The success of the Company is dependent upon the continued services of the
Company's senior management. The loss of the services of these individuals,
including Joel Newman, its Chairman of the Board, President and Chief Executive
Officer, and Hatch Masuda, its Senior Vice President, Design and Product
Development, could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company has entered into
two-year employment agreements with Messrs. Newman and Masuda effective upon
the consummation of the Offering. The Company does not maintain key person life
insurance policies on any members of management. See "Management--Employment
Agreements and Termination of Employment and Change in Control Arrangements."

The Company believes that its future success will also depend in part upon
its ability to attract and retain qualified management personnel. Competition
for such personnel is intense and the Company competes for qualified personnel
with numerous other employers, some of whom have greater financial and other
resources than the Company. There can be no assurance that the Company will be
successful in attracting and retaining such personnel. See "Management."

INTEGRATION OF POTENTIAL ACQUISITIONS

The Company plans to use a portion of the net proceeds from the Offering
for acquisitions of brand names, product lines and other companies or assets
that the Company believes would complement or expand its existing business.
Acquisitions involve a number of risks that could adversely affect the
Company's operating results, including: (i) the diversion of management's
attention; (ii) the risk that the acquired assets or the operations and
personnel of the acquired companies will not be effectively integrated; (iii)
the amortization of acquired intangible assets; (iv) the assumption of
potential liabilities, disclosed or undisclosed, associated with the assets or
businesses acquired, which liabilities may exceed the amount of
indemnification, if any, available from the seller; (v) the risk that the
financial and accounting systems utilized by the businesses acquired will not
meet the Company's standards; (vi) the risk that the businesses acquired will
not maintain the quality of services that the

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Company has historically provided; (vii) the dilutive effect of the use of the
Company's Common Stock as consideration for acquisitions; and (viii) the
inability to attract and retain qualified management. There can be no assurance
that the Company will consummate future acquisitions on satisfactory terms, if
at all, that adequate financing will be available on terms acceptable to the
Company, if at all, or that any acquired operations will be successfully
integrated or that such operations will ultimately have a positive impact on
the Company's business, financial condition and results of operations. See
"Business--Strategy."

RISKS ASSOCIATED WITH NEW MANUFACTURING OPERATIONS

In November 1997, the Company acquired a manufacturing facility in the PRC
from an affiliate of Windmere-Durable. Prior to such acquisition, the Company
had no experience operating a manufacturing facility. In addition, the PRC
manufacturing facility commenced operations in early 1997 and at the time of
the acquisition was not fully on-line. The Company believes that its future
success will depend in part upon its ability to bring the PRC facility fully
on-line, to operate the facility effectively and to integrate such
manufacturing operations with the other aspects of the Company's operations,
including product design and development, sales, distribution and marketing.
For example, in 1997, the Company incurred approximately $4.3 million of
freight costs due primarily to the Company's decision to airfreight products to
customers during the 1997 holiday season. Such additional airfreight costs
resulted mainly from delays in bringing the PRC facility to required production
levels. There can be no assurance that the Company will be able to effectively
operate the facility at full production capacity and integrate the facility
with the Company's other operations, and the failure to do so could have a
material adverse effect on the Company's business, financial condition and
results of operations.

RISKS ASSOCIATED WITH DEVELOPMENT AND MANUFACTURING

The Company's product design and engineering team typically develops new
products over a period of six months. Thereafter, the preparation of the
manufacturing process through the first production run generally requires
another three to six months. Any delays in the foregoing process could prevent
the Company from receiving expected revenue from the sales of that product,
which could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company does not maintain long-term
purchase contracts with manufacturers and operates principally on a purchase
order basis. The loss of a supplier could, in the short-term, have a material
adverse effect on the Company's business, financial condition and results of
operations until alternative supply arrangements were secured. See
"Business--Sourcing and Manufacturing."

AVAILABILITY OF TECHNOLOGY

The Company relies on available technology developed by others as the
basis for the operations and features of its products. The Company currently
has no intention of expanding its business to include the development of
innovative technology. As a result, the Company is subject to the risk that a
technological development not available to it will result in the obsolescence
of various of its products or competitive advantages to the developers of such
technology. The Company is also subject to the risk that some technological or
new product development that is not available to the Company, either due to
third-party proprietary protection, cost, or otherwise, could render the
marketing of the Company's products difficult or not profitable due to
competitive pressure from the new development. See "Business--Product Design
and Development."

SEASONALITY AND FLUCTUATIONS IN QUARTERLY PERFORMANCE

The Company's business is highly seasonal, with operating results varying
substantially from quarter to quarter. During 1997, approximately 82.5% of the
Company's sales took place in the third and fourth quarters of the calendar
year. In order to facilitate sales during the year-end buying season, the
Company must make financial commitments and pay for product inventory and
certain expenses well in advance of any sales of such inventory. Typically, the
Company expects to experience lower profitability or losses in the first and
second quarters of each year for this reason. As a result, if the

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<PAGE>

timing or amount of customer orders fall below the Company's expectations,
operating results and cash flows would be materially adversely affected because
expenses based on these expectations will have already been incurred. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

RISKS ASSOCIATED WITH RETAIL SALES

The Company is subject to many of the same economic factors that impact
other designers and manufacturers of retail-oriented products, including costs
of materials, insurance, inflation, transportation, and retail sector and
general economic conditions, which can impact consumer demand in general and
for the Company's products in particular. These factors could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, because the Company's business strategy is heavily
dependent on the use of brand names, adverse publicity with respect to products
that are not sold by the Company but bear the brand names used by the Company
could have a material adverse effect on the Company's business, financial
condition and results of operations, notwithstanding the fact that the products
at issue are different than those sold by the Company.

PRODUCT LIABILITY

Any defects in the Company's products that result in personal injury could
have a material adverse effect on the Company's business, financial condition
and results of operations. The Company maintains insurance to cover such risks;
however, the coverage in certain events may not be adequate to insure against
all product liability claims.

DEPENDENCE ON MANAGEMENT INFORMATION SYSTEMS; YEAR 2000 ISSUES

The Company believes that the successful operation of the Company's
business is dependent in part on its computerized inventory management, order
processing and distribution systems and other computer software programs and
operating systems. These systems will require modification, improvement or
replacement as the Company grows. The Company may, from time to time,
experience delays, complications or expenses in integrating and operating these
systems, any of which could have a material adverse effect upon the Company's
business, financial condition and results of operations.

The Company has implemented a Year 2000 program to ensure that its
computer systems and applications will function properly beyond 1999. While the
Company believes that it has allocated adequate resources for this purpose and
expects its Year 2000 date conversion program to be completed successfully on a
timely basis, no assurance can be given that these efforts will be successful
or that such efforts will be completed on a timely basis. The failure to
successfully complete such implementation on a timely basis may cause
interruptions in operations which could have a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
although the Company is discussing with its vendors and customers the
possibility of any interface difficulties which may affect the Company, the
ability of third parties with whom the Company transacts business to address
their Year 2000 issues is outside the Company's control and no assurance can be
given that such interface difficulties will not arise or that such difficulties
will not have a material adverse effect on the Company's business, financial
condition or results of operations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

RISK OF DOING BUSINESS IN FOREIGN COUNTRIES; RISK OF IMPORT LIMITATIONS

The Company's products are principally manufactured in the PRC both at the
Company's manufacturing facility and by independent manufacturers. The Company
has also engaged independent manufacturers in Indonesia, Malaysia, Mexico,
Thailand and the Philippines. The Company does not have long-term contracts
with any of its independent manufacturers. Manufacturing in the PRC and in
other foreign countries is subject to a number of risks, including but not
limited to transportation delays and interruptions, political and economic
disruptions, the imposition of tariffs and import and export controls, loss of
property or revenue from expropriation or political demands, and changes in

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<PAGE>

governmental policies. While the Company to date has not experienced any
material adverse effects due to such risks, there can be no assurance that such
events will not occur in the future and possibly result in increases in costs
and delays of, or interference with, product deliveries resulting in losses of
sales and damage to customer relationships.

Generally, the PRC and other countries in which the Company does business
may not offer legal mechanisms to redress an unfair trade practice, contract
breach, or other problem requiring the enforcement of contractual provisions or
other redress. In particular, the PRC does not have a well-developed,
consolidated body of law governing foreign investment enterprises, and the
administration of laws and regulations by government agencies may be subject to
considerable discretion and variation and administrative review and approval by
various national and local agencies of the PRC government. As a result, in the
event of any damage to the Company resulting from the breach of a contract, the
failure to fulfill manufacturing commitments, the taking of Company property,
or other similar event creating a loss for the Company or interruption of its
business, there may not be an adequate avenue of recourse against the parties
responsible for such damages.

MOST FAVORED NATION RISK

The Company has a significant amount of its assets in the PRC, primarily
consisting of inventory, equipment and molds. The supply and cost of products
manufactured in the PRC can be adversely affected, among other reasons, by
changes in foreign currency exchange rates, increased import duties, imposition
of tariffs, imposition of import quotas, interruptions in sea or air
transportation and political or economic changes. Presently, products imported
into the United States from the PRC are subject to favorable duty rates based
on the "Most Favored Nation" status of the PRC ("MFN Status"). MFN Status is
reviewed on an annual basis by the United States President and Congress and was
renewed in June 1997.

If MFN Status for goods produced in the PRC were removed, there would be a
substantial increase in tariffs imposed on goods of PRC origin entering the
United States, including those manufactured by the Company, which could have a
material adverse effect on the Company's business, financial condition and
results of operations. Although the Company produces products in other
locations, at the present time, the Company plans to continue its production
primarily in the PRC.

CURRENCY RISKS

Although the Company currently effects substantially all of its
transactions in United States dollars and most of its sales are made in the
United States, in those situations in which transactions are in foreign
currencies the Company is exposed to risks such as currency instability,
currency exchange losses and the ability to repatriate earnings under existing
exchange control laws. Moreover, the Company's operations in the PRC involve
manufacturing and other business operations that rely upon a currency other
than the United States dollar. The Company does not currently engage in
hedging, and no assurance can be given that an effective currency hedging
policy could offset these currency risks.

GOVERNMENT REGULATION

Most of the Company's customers (as well as several state and local
authorities) require that the Company's products meet the safety standards of
the Underwriters Laboratories, Inc. The Company's telephones and clock radios
sold for use in the United States must be registered with and approved by the
United States Federal Communications Commission (the "FCC") and its portable
microwave ovens must be registered with and approved by the United States Food
and Drug Administration (the "FDA"). Products sold in Canada must comply with
the standards of the Canadian Standards Association. In addition, the Company's
products must meet the applicable safety standards imposed by the other
countries in which they are sold. The Company is subject to numerous tariffs,
duties, charges and assessments on the import of its products. The Company
retains import agencies and expediters to facilitate the import of its products
and the payment of these charges and duties. Although these duties and charges
have not substantially affected the Company's ability to market its products
for delivery in

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<PAGE>

the United States and elsewhere, regulations affecting these charges and duties
are subject to change, which could have the effect of increasing the cost of
goods imported and sold by the Company. See "Business--Regulation."

NO DIVIDENDS

The Company presently intends to retain all earnings, if any, for the
operation and development of its business and does not anticipate paying any
cash dividends on the Common Stock in the foreseeable future. Any future
determination as to the payment of cash dividends will be at the discretion of
the Board of Directors and will depend on a number of factors, including future
earnings, capital requirements, the financial condition and prospects of the
Company, any restrictions under credit agreements existing from time to time,
and such other factors as the Company's Board of Directors may deem relevant.
In addition, the Company's credit facility contains covenants that restrict the
Company from making certain capital and other distributions. The Company has
invested, and intends to continue to invest, the earnings of its foreign
subsidiaries in foreign operations indefinitely, rather than distribute them to
the Company. As a result, U.S. income taxes have not been provided for on such
undistributed earnings. At December 31, 1996 and 1997, the cumulative amount of
undistributed earnings on which the Company had not recognized United States
income taxes was approximately $2.2 million and $7.5 million, respectively. See
"Use of Proceeds" and "Dividend Policy."

CONTROL BY AND CERTAIN TRANSACTIONS WITH PRINCIPAL SHAREHOLDERS

Upon completion of the Offering, the current shareholders of the Company
will own approximately % of the outstanding shares of Common Stock
(approximately % if the Underwriters' over-allotment option is exercised
in full). Included in this percentage are shares of Common Stock owned by Joel
Newman and Windmere, who in the aggregate will own approximately % of the
outstanding shares of Common Stock (approximately % if the Underwriters'
over-allotment option is exercised in full). Accordingly, the Company's current
shareholders, as a group, will have the ability to control all matters
requiring shareholder approval, including the election of the Company's
directors and any amendments to the Company's Amended and Restated Articles of
Incorporation (the "Articles") and Amended and Restated Bylaws (the "Bylaws"),
and to control the business of the Company. Such control could preclude any
acquisition of the Company and could adversely affect the market price of the
Common Stock. See "Principal and Selling Shareholders" and "Description of
Capital Stock." In addition, the Company leases an aircraft from a corporation
wholly-owned by Mr. Newman, and Windmere provides the Company with certain
administrative services with respect to its PRC manufacturing facility. See
"Certain Transactions."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
shares of Common Stock, of which the shares sold in the Offering (plus
an additional shares if the Underwriters' over-allotment option is
exercised in full) will be freely tradeable without restriction or further
registration under the Securities Act, except for any shares owned by an
affiliate of the Company, which will be subject to the resale limitations of
Rule 144 ("Rule 144") under the Securities Act. The remaining shares
(the "Restricted Shares") are subject to certain restrictions described below.
Holders of of the Restricted Shares will be eligible to sell a portion of
such shares pursuant to Rule 144 beginning 90 days after the date of this
Prospectus, subject to the manner of sale, volume, notice and information
requirements of Rule 144. Notwithstanding the eligibility of certain shares to
be sold following the completion of the Offering, such shares are subject to
certain additional restrictions on transfer pursuant to certain agreements
described below.

The Company and its executive officers, directors, and the Selling
Shareholders have agreed with Warburg Dillon Read LLC (the "Lock-up
Agreements") that they will not sell, contract to sell, pledge, grant any
option to purchase, transfer or otherwise dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into, or exchangeable
for, Common Stock or warrants or other rights to purchase or acquire shares of
Common Stock or permit the registration of shares of Common Stock, for a period
of 180 days after the date of this Prospectus, without the prior written

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<PAGE>

consent of Warburg Dillon Read LLC, except, without such consent, the Company
may issue and register, and the Company and the Selling Shareholders may sell,
the shares of Common Stock offered in the Offering (including the Underwriters'
over-allotment option). Warburg Dillon Read LLC, in its sole discretion,
without notice, may release some or all of the shares subject to Lock-up
Agreements from time to time. Sales of substantial amounts of Common Stock in
the public market, or the availability of such shares for future sale, could
adversely affect the market price of the Common Stock and could impair the
Company's future ability to raise additional capital through an offering of its
equity securities. See "Shares Eligible for Future Sale" and "Underwriting."

In addition, 1,000,000 shares of Common Stock have been reserved for
issuance under the Company's 1997 Stock Option Plan (the "Plan"), 649,000 of
which are currently subject to outstanding options. With respect to 618,700 of
such options which were granted February 28, 1997, (i) as of the date of this
Prospectus, 123,740 will be vested, and (ii) 123,740 will vest on each February
28, commencing February 28, 1999. With respect to 29,900 of such options, 5,980
will vest on each anniversary of October 27, 1997, the date they were granted.
With respect to 400 of such options, 80 will vest on each anniversary of
November 30, 1997, the date they were granted. Once vested, the shares issuable
upon the exercise all the foregoing options would be eligible for resale
subject to compliance with Rule 701 ("Rule 701") under the Securities Act, the
stock option agreements and the Lock-up Agreements with Warburg Dillon Read LLC
described above. Under the stock option agreements pursuant to which the
options were granted, one fifth of the options granted to each employee vest on
each anniversary of the date of grant; provided, however, that the exercise of
any of the options or the sale or other disposition of any shares of Common
Stock acquired pursuant to the exercise of such options for a period of 180
days after the date of this Prospectus without the prior written consent of the
Underwriters is prohibited. Additionally, the Company intends to file
registration statements under the Securities Act to register all shares of
Common Stock subject to then outstanding stock options and Common Stock
issuable pursuant to the Plan. The Company expects to file these registration
statements following the closing of the Offering, and such registration
statements are expected to become effective upon filing. Shares covered by
these registration statements will thereupon be eligible for sale in the public
markets, subject only to the limitations of Rule 144 that are applicable to
affiliates, the Lock-up Agreements and the exercise and vesting schedule in the
respective stock option agreements. See "Management--Stock Option Plan" and
"Shares Eligible for Future Sale."

Upon the expiration of 180 days after the date of this Prospectus,
Windmere and Joel Newman, the Company's Chairman, Chief Executive Officer and
President, together will hold an aggregate of shares ( shares if
the Underwriters' over-allotment option is exercised in full), as well as
options held by Mr. Newman to acquire 175,000 shares, and each will have the
right to (i) request that the Company register, as expeditiously as possible,
any or all of the Common Stock then owned by such shareholder, including all
shares of Common Stock issuable pursuant to any derivative securities of the
Company then held by such shareholder and (ii) include such shares of Common
Stock in registrations proposed to be effected by the Company. See "Shares
Eligible for Future Sale--Registration Rights."

Following the Offering, the Company may issue its Common Stock from time
to time in connection with the acquisition of the assets or capital stock of
acquisition targets. Such securities may be issued in registered transactions
or in transactions exempt from registration under the Securities Act.

REPAYMENT OF LOANS TO SHAREHOLDERS AND AFFILIATES

As a result of the Offering, two of the Company's shareholders will
receive sufficient funds to enable them to repay all of their indebtedness to
the Company. Windmere has agreed to repay a promissory note in the principal
amount of $2.0 million due April 15, 2001 and bearing interest at the rate of
8.0% per annum that was issued to the Company as consideration for the purchase
of Common Stock. Joel Newman, the Company's Chairman, Chief Executive Officer
and President, has agreed to repay an approximately $224,000 loan from the
Company that bears interest at the rate of 7.0% per annum and is payable on
demand and an approximately $330,000 loan made by the Company to a corporation
wholly-owned by Mr. Newman. See "Capitalization," "Management" and "Certain
Transactions."

16
<PAGE>

NO PRIOR MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there will be no public market for the Common Stock
and there can be no assurance that an active public market for the Common Stock
will develop or, if a trading market does develop, that it will continue after
the Offering. The initial public offering price will be determined by
negotiations among the Company, the Selling Shareholders and the Underwriters.
See "Underwriting" for a description of the factors considered in determining
the initial public offering price. The market price of the Common Stock could
be subject to significant fluctuations in response to variations in financial
results or announcements of material events by the Company or its competitors.
Quarterly operating results of the Company, changes in general conditions in
the economy or the consumer electronics industry or other developments
affecting the Company or its competitors could cause the market price of the
Common Stock to fluctuate substantially. In addition, the equity markets have,
on occasion, experienced significant price and volume fluctuations that have
affected the market prices for many companies' securities and that have often
been unrelated to the operating performance of these companies. Any such
fluctuations that occur following completion of the Offering may adversely
affect the market price of the Common Stock.

CERTAIN ANTI-TAKEOVER PROVISIONS

Certain provisions of Florida Law and the Articles and Bylaws of the
Company may make a change in control of the Company more difficult to effect,
even if a change in control were in the shareholders' interest. In addition,
the Articles allow the Board of Directors to determine the terms of preferred
stock which may be issued by the Company without approval of the holders of the
Common Stock, and thereby enable the Board of Directors to inhibit the ability
of the holders of the Common Stock to effect a change in control of the
Company. See "Description of Capital Stock--Provisions with Possible
Anti-Takeover Effect."

Employment agreements between the Company and each of Joel Newman, the
Company's Chairman, Chief Executive Officer and President, Hatch Masuda, the
Company's Senior Vice President, Design and Product Development, and Leonor
Schuck, the Company's Vice President, Finance and Chief Financial Officer,
require the Company to pay certain amounts upon termination of employment
following certain events, including a change in control of the Company. Such
agreements may inhibit a change in control of the Company. See
"Management--Employment Agreements and Termination of Employment and Change in
Control Arrangements."

BROAD DISCRETION OF MANAGEMENT IN APPLYING PROCEEDS OF OFFERING

The Company intends to use the net proceeds of the Offering for repayment
of certain indebtedness, possible future acquisitions and general corporate
purposes. To the extent proceeds are used for purposes other than the repayment
of debt, the Company's management will have broad discretion in applying the
net proceeds of the Offering. See "Use of Proceeds."

IMMEDIATE AND SUBSTANTIAL DILUTION

Purchasers of shares of Common Stock in the Offering will experience
immediate and substantial dilution of approximately $ in the net
tangible book value per share of Common Stock from the initial public offering
price. See "Dilution."

17
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of
Common Stock offered by the Company (at an assumed initial public offering
price of $ per share, the midpoint of the range of estimated offering
prices set forth on the cover page hereof), after deducting underwriting
discounts and commissions and estimated offering expenses, are estimated to be
approximately $ million. The Company will not receive any of the proceeds
from the sale of any Common Stock by the Selling Shareholders. Of the net
proceeds to the Company, (i) approximately $ million will be used to repay
a portion of the Company's outstanding bank indebtedness, (ii) approximately
$11.0 million will be used to repay the outstanding indebtedness of two of its
wholly-owned Hong Kong subsidiaries to an affiliate of Windmere, and (iii) the
remaining net proceeds will be applied to fund possible future acquisitions and
for general corporate purposes. See "Certain Transactions." There are no
present understandings, commitments or agreements with respect to any future
acquisition. Pending the application of the remaining net proceeds, the Company
will invest such proceeds in money market funds or other short-term, investment
grade, interest bearing securities.

As of June 26, 1998, the outstanding balance under the Company's revolving
credit facility consisted of $29.8 million, bearing interest at the rate of
8.5% per annum and payable on June 8, 2001. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Certain Transactions."

Indebtedness of the Company's Hong Kong subsidiaries to be repaid consists
of approximately $11.0 million bearing interest at 1.0% above the prime rate of
NationsBank, National Association (South) (which prime rate was 8.5% as of
March 31, 1998), approximately $6.2 million of which is payable in October
2003, approximately $1.8 million of which is payable in 24 equal quarterly
installments from 1998 through 2003 and approximately $3.0 million of which is
payable on demand, but not later than October 21, 2003.

Joel Newman, the Company's Chairman, Chief Executive Officer and
President, has agreed with the Company to use a portion of the net proceeds
from his sale of Common Stock in the Offering to repay in full an approximately
$224,000 loan made by the Company to him and an approximately $330,000 loan
made by the Company to a corporation wholly-owned by Mr. Newman. The $224,000
loan bears interest at 7.0% per annum, is unsecured and is payable on demand.
The $330,000 loan does not bear interest and is unsecured and payable on
demand. Windmere has agreed with the Company to use a portion of the net
proceeds from its sale of Common Stock in the Offering to repay in full its
8.0% promissory note due April 15, 2001 in the principal amount of $2.0
million, payable to the Company. See "Capitalization." Windmere issued such
promissory note to the Company in consideration for its subscription for Common
Stock in April 1996. See "Certain Transactions" and "Principal and Selling
Shareholders."

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its Common
Stock. The Company presently intends to retain all earnings, if any, for the
operation and development of its business and does not anticipate paying any
cash dividends on the Common Stock in the foreseeable future. Any future
determination as to the payment of cash dividends will be at the discretion of
the Board of Directors and will depend on a number of factors, including future
earnings, capital requirements, the financial condition and prospects of the
Company, any restrictions under credit agreements existing from time to time,
and such other factors as the Company's Board of Directors may deem relevant.
In addition, the Company's new credit facility will contain covenants that
restrict the Company from making certain capital and other distributions.

The Company has invested, and intends to continue to invest, the earnings
of its foreign subsidiaries in foreign operations indefinitely, rather than
distribute them to the Company. As a result, U.S. income taxes have not been
provided for on such undistributed earnings. At December 31, 1996 and 1997, the
cumulative amount of undistributed earnings on which the Company had not
recognized United States income taxes was approximately $2.2 million and $7.5
million, respectively.

18
<PAGE>

CAPITALIZATION

The following table sets forth the borrowings under lines of credit,
current portion of long-term debt and capitalization of the Company as of March
31, 1998 and as adjusted to reflect the net proceeds from the sale by the
Company of shares of Common Stock offered hereby (at an assumed
offering price of $ per share (the midpoint of the range of estimated
offering prices set forth on the cover page hereof) and after deducting
underwriting discounts and commissions and estimated offering expenses), and
the application of the estimated net proceeds therefrom as described under "Use
of Proceeds." This table should be read in conjunction with the Consolidated
Financial Statements and the notes thereto included elsewhere in this
Prospectus. See also "Use of Proceeds" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
MARCH 31, 1998
-----------------------------
PRO FORMA
ACTUAL AS ADJUSTED(1)
----------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Borrowing under line of credit ............................................... $ 18,576 $
Current portion of notes payable to affiliate ................................ 330
Notes payable to shareholders ................................................ 7,135
-------- --------
Total short-term debt ........................................................ $ 26,041 $
======== ========
Long-term debt:
Notes payable to affiliate, long-term portion ................................ $ 7,785 $
Shareholders' equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none issued
and outstanding ............................................................ -- --
Common stock, $0.01 par value; 50,000,000 shares authorized, 10,000,000
shares outstanding; shares outstanding pro forma as adjusted(2) ............ 100
Additional paid-in capital ................................................... 9,900
Promissory notes due on purchase of Common Stock(3) .......................... (5,000) --
Retained earnings ............................................................. 6,791
-------- --------
Total shareholders' equity .................................................. 11,791
-------- --------
Total capitalization ........................................................ $ 19,576 $
======== ========
</TABLE>

- ----------------
(1) Pro forma adjustment reflects the payment of certain share subscription
receivables. See note (3) below.
(2) Does not include: (i) an aggregate of 649,000 shares of Common Stock
reserved for issuance upon exercise of outstanding options under the Plan
and (ii) an aggregate of 351,000 shares of Common Stock reserved for
issuance upon exercise of options available for grant under the Plan. See
"Management--Stock Option Plan" and "Description of Capital Stock--Options
to Purchase Common Stock."
(3) Represents certain share subscription receivables, consisting of promissory
notes in the aggregate principal amount of $5.0 million issued to the
Company by Windmere as consideration for the purchase of Common Stock. See
"Certain Transactions." One promissory note, in the principal amount of
$3.0 million, has been repaid in full, and Windmere has agreed to repay in
full the other promissory note, in the principal amount of $2.0 million,
with a portion of the net proceeds to Windmere from the sale of Common
Stock in the Offering. See "Use of Proceeds" and "Principal and Selling
Shareholders."

19
<PAGE>

DILUTION

Purchasers of Common Stock offered hereby will experience an immediate and
substantial dilution in the net tangible book value of the Common Stock from
the initial public offering price. At March 31, 1998, the net tangible book
value of the Company was $8.3 million, or $0.83 per share. Net tangible book
value per share is determined by dividing the Company's net tangible book value
(tangible assets less total liabilities), by the number of shares of Common
Stock outstanding. Without taking into account any changes in net tangible book
value after March 31, 1998, other than to give effect to (i) the issuance and
sale of the shares of Common Stock offered by the Company hereby (at an
assumed initial public offering price of $ per share, the midpoint of the
range of estimated offering prices set forth on the cover page hereof) after
deducting underwriting discounts and commissions and estimated offering
expenses to be paid by the Company and (ii) the application of the net proceeds
to repay indebtedness as set forth in "Use of Proceeds," the net tangible book
value of the Company (assuming payment in full of certain share subscription
receivables, see note (a) below and "Certain Transactions") would have been
$ or $ per share. This represents an immediate increase in net
tangible book value of $ per share to existing shareholders and an
immediate dilution in net tangible book value of $ per share to new
investors purchasing shares of Common Stock in the Offering. The following
table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share ................................. $
Net tangible book value per share at March 31, 1998(1) ........................ $ 0.83
Increase in net tangible book value per share attributable to new investors ... ------
Pro forma net tangible book value per share after the Offering .................. --------
Dilution per share to new investors ............................................. $
========
</TABLE>

- ----------------
(1) Does not include: (i) an aggregate of 649,000 shares of Common Stock
reserved for issuance upon exercise of outstanding options under the Plan
and (ii) an aggregate of 351,000 shares of Common Stock reserved for
issuance upon exercise of options available for grant under the Plan. To
the extent that such options are eventually exercised, there may be
further dilution to new investors. See "Management--Stock Option Plan,"
"Description of Capital Stock--Options to Purchase Common Stock" and
"Shares Eligible for Future Sale." Assuming the Underwriters'
over-allotment option is exercised in full, existing shareholders will
hold shares, or % of the total number of shares outstanding after the
Offering, and the number of shares held by new investors will increase by
shares to shares, or % of the total shares of Common Stock
outstanding after the Offering. See "Principal and Selling Shareholders."

The following table summarizes as of March 31, 1998, the difference
between the number of shares of Common Stock purchased from the Company, the
total consideration paid and the average price per share paid by existing
shareholders and new investors purchasing shares in this Offering.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------------- ------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Existing shareholders(a) ......... % $ % $
New investors .................... --------- ----- ----------- -----
Total .......................... 100.0% 100.0%
========= ===== =====
</TABLE>

- ----------------
(a) Assuming payment in full of certain share subscription receivables,
consisting of promissory notes in the aggregate principal amount of $5.0
million issued to the Company by Windmere as consideration for the
purchase of Common Stock. See "Certain Transactions." One promissory note,
in the principal amount of $3.0 million due on April 15, 1998, has been
repaid in full, and Windmere has agreed to repay in full the other
promissory note, in the principal amount of $2.0 million, with a portion
of the net proceeds to Windmere from the sale of Common Stock in the
Offering. See "Use of Proceeds" and "Principal and Selling Shareholders."

20
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following Selected Consolidated Financial Data for the years ended
December 31, 1995, 1996 and 1997 and as of December 31, 1995, 1996 and 1997 are
derived from the Consolidated Financial Statements of the Company, which have
been audited by Ernst & Young LLP, independent certified public accountants,
except for the financial statements of Durable Electronics Industries Limited,
a consolidated subsidiary of the Company, which were audited by Grant Thornton,
independent auditors. The following Selected Consolidated Financial Data for
the years ended December 31, 1993 and 1994 and as of December 31, 1993 and 1994
present the combination of the financial statements of the Company's
predecessors, which financial statements have been audited by a
nationally-recognized firm of independent certified public accountants. The
income statement data for the three months ended March 31, 1997 and 1998 and
the balance sheet data as of March 31, 1998 have been derived from unaudited
interim consolidated financial statements contained elsewhere herein, which in
the opinion of management, include all adjustments (consisting of only normal
recurring adjustments) necessary for a fair presentation of the information set
forth therein. The Selected Consolidated Financial Data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements of the
Company and the related notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1993 1994 1995 1996 1997
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Net sales ............................... $ 9,228 $ 9,490 $ 13,353 $ 39,060 $ 208,417
Cost of products sold ................... 7,602 8,104 11,993 35,172 186,433
------------ ------------ ------------ ------------ ------------
Gross profit ............................ 1,626 1,386 1,360 3,888 21,984
Selling expenses(1) ..................... 476 618 846 1,285 10,533
General and administrative expenses ..... 690 791 1,155 1,842 4,598
Write-off of advances to affiliate ...... -- -- -- 980 --
------------ ------------ ------------ ------------ ------------
Total expenses .......................... 1,166 1,409 2,001 4,107 15,131
------------ ------------ ------------ ------------ ------------
Income (loss) from operations ........... 460 (23) (641) (219) 6,853
Other (income) expense:
Interest expense ....................... 33 88 307 201 1,763
Interest and other income .............. (207) (117) (197) (587) (581)
------------ ------------ ------------ ------------ ------------
Total other (income) expense ............ (174) (29) 110 (386) 1,182
------------ ------------ ------------ ------------ ------------
Income (loss) before income taxes ....... 634 6 (751) 167 5,671
Income tax benefit ...................... -- -- -- (135) (351)
------------ ------------ ------------ ------------ ------------
Net income (loss) ....................... $ 634 $ 6 $ (751) $ 302 $ 6,022
============ ============ ============ ============ ============
Net income (loss) per common share:
Basic and diluted ...................... $ 0.06 $ -- $ (0.08) $ 0.03 $ 0.60
Weighted average number of common
shares outstanding:
Basic .................................. 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000
Diluted(2) ............................. 10,000,000 10,000,000 10,000,000 10,000,000 10,093,024

<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1997 1998
-------------- --------------
<S> <C> <C>
STATEMENT OF OPERATIONS:
Net sales ............................... $ 8,420 $ 38,900
Cost of products sold ................... 7,210 35,358
------------ ------------
Gross profit ............................ 1,210 3,542
Selling expenses(1) ..................... 543 1,728
General and administrative expenses ..... 867 1,986
Write-off of advances to affiliate ...... -- --
------------ ------------
Total expenses .......................... 1,410 3,714
------------ ------------
Income (loss) from operations ........... (200) (172)
Other (income) expense:
Interest expense ....................... 53 735
Interest and other income .............. (122) (128)
------------ ------------
Total other (income) expense ............ (69) 607
------------ ------------
Income (loss) before income taxes ....... (131) (779)
Income tax benefit ...................... (201) (285)
------------ ------------
Net income (loss) ....................... $ 70 $ (494)
============ ============
Net income (loss) per common share:
Basic and diluted ...................... $ 0.01 $ (0.05)
Weighted average number of common
shares outstanding:
Basic .................................. 10,000,000 10,000,000
Diluted(2) ............................. 10,000,000 10,309,350
</TABLE>

<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, MARCH 31,
------------------------------------------------- ----------
1993 1994 1995 1996 1997 1998
--------- --------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents ......... $1,432 $1,877 $ 434 $ 2,672 $ 2,031 $ 2,210
Current assets .................... 2,577 6,158 5,318 9,804 62,673 55,468
Total assets ...................... 2,800 6,321 5,492 10,372 68,593 62,056
Total debt ........................ 875 3,438 3,881 28 37,167 33,826
Total shareholders' equity ........ 1,706 1,712 960 6,263 12,285 11,791
</TABLE>
- ---------------
(1) Selling expenses in 1995, 1996, 1997 and the three months ended March 31,
1998 included freight costs of $49,000, $20,000, $4.5 million and
$124,000, respectively. Approximately $4.3 million of such freight costs
in 1997 were due primarily to the Company's decision to airfreight
products to customers during the 1997 holiday season. The additional
airfreight costs resulted mainly from delays in bringing the Company's PRC
manufacturing facility to required production levels.
(2) Includes the impact of 649,000 shares of Common Stock issuable upon the
exercise of outstanding stock options granted under the Company's 1997
Stock Option Plan. See Note 10 to the Company's Consolidated Financial
Statements included elsewhere in this Prospectus.

21
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION ON THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO INCLUDED ELSEWHERE IN THIS
PROSPECTUS.

OVERVIEW AND HIGHLIGHTS

The Company derives substantially all of its revenues from sales of
consumer electronic products, including audio, video and telecommunications
products, such as televisions, VCRs, home audio products and telephones, as
well as portable microwave ovens. The Company currently offers products under
licensed and owned brand names, including White-Westinghouse, Admiral, Philco,
Craig and Newtech, and also under private labels. The Company sells its
products to mass merchandisers, including Kmart and Wal-Mart, and to other
retailers, including Rite-Aid, Zellers and Ames.

Net sales represent gross sales after product returns and warranty claims.
For 1995, 1996, 1997 and the three months ended March 31, 1998, product returns
approximated 3.8%, 0.8%, 1.6% and 2.3%, respectively, of gross sales. In 1995,
1996, 1997 and the three months ended March 31, 1998, approximately 97.0%,
83.0%, 75.0% and 73.0%, respectively, of the Company's gross sales were made
under net sale arrangements, whereby the Company's customers are responsible
for product returns, which cannot be returned to the Company. The Company plans
to maintain or increase the percentage of sales that are on a net basis, but
there can be no assurance that the Company will be successful in maintaining or
increasing such percentage. Any increase in the rate of product returns and
warranty claims would have a material adverse effect on the Company's business,
financial condition and results of operations.

The Company's revenues are generated principally from three sources:

(i) DOMESTIC SALES. Domestic sales are made to customers located in the
United States and Canada from the Company's inventories maintained at U.S.
warehouse facilities. The Company's strategy of selling out of U.S. warehouses
enables it to provide timely delivery. The Company purchases products overseas
for its own account and warehouses the products in public warehouses in Los
Angeles, California, Memphis, Tennessee, Little Rock, Arkansas, and Miami,
Florida, and in warehouse space at its main office in Miami, Florida. The
Company is responsible for costs of shipping, insurance, customs clearance and
duties, storage and distribution related to such warehouse products and,
therefore, domestic sales command higher sales prices than import sales.
Domestic sales comprised approximately 36% and 30% of the Company's total sales
in 1997 and the three months ended March 31, 1998, respectively.

(ii) IMPORT SALES. Import sales are made by delivering products FOB
shipping point. Import sales are made to customers located within or outside
the United States who pay pursuant to their own international, irrevocable,
transferable letters of credit or on open credit terms with the Company. The
Company has the right to draw against the customer's letter of credit, if any,
once the products are delivered to the port of embarkation and the appropriate
documentation has been presented to the issuing bank within the time periods
established by the letter of credit. Import sales comprised approximately 26%
and 32% of the Company's total sales in 1997 and the three months ended March
31, 1998, respectively.

(iii) THIRD-PARTY MANUFACTURER SALES. Third-party manufacturer sales are
made in certain circumstances under the Kmart Agreement pursuant to which the
Company appointed Kmart as the exclusive "discount department store" in the
United States to market and sell certain products under the White-Westinghouse
Trademark. See "Business--Brand Portfolio--White-Westinghouse" and "--Strategic
Alliances." Under the terms of the Kmart Agreement, the Company supplies Kmart,
either through the Company or through other manufacturers, with a broad range
of audio, video and

22
<PAGE>

telecommunications products. Kmart has the right to procure the manufacture of
products from other manufacturers under the White-Westinghouse Trademark on
behalf of the Company. In such cases, Kmart has the option of paying the
purchase price to third-party manufacturers directly or making such payment to
the Company, in which case the Company pays the third-party manufacturers. In
addition, Kmart pays the Company a percentage of such purchase price. In the
event that Kmart fails to pay a third-party manufacturer, the Company must make
such payment. Because the Company is responsible for payment to third-party
manufacturers under the Kmart Agreement, the Company records the price paid to
third-party manufacturers plus the percentage payable to the Company as revenue
and records the price paid to third-party manufacturers as cost of products
sold. Gross profit margins on these sales are typically lower than those
resulting from domestic or import sales. Third-party manufacturer sales
comprised approximately 38% of the Company's total sales in each of 1997 and
the three months ended March 31, 1998, respectively.

Cost of products sold includes both the cost of goods purchased from
suppliers and manufacturing costs associated with the Company's PRC
manufacturing facility. The Company's PRC manufacturing facility accounted for
approximately 7.1% of the Company's product supply in 1997 and 14.7% during the
three months ended March 31, 1998. The Company expects to source a higher
percentage of its products from this facility in 1998 than it did in 1997.
Prior to the Company's acquisition of the facility, the Company had no
experience operating a manufacturing facility. In addition, the PRC
manufacturing facility commenced operations in early 1997 and at the time of
the acquisition was not fully on-line. The Company believes that its future
success will depend in part upon its ability to bring the PRC facility fully
on-line, to operate the facility effectively and to integrate such
manufacturing operations with the other aspects of the Company's operations,
including product design and development, sales, distribution and marketing.
Cost of products sold also includes freight and duties for domestic sales.
Included in cost of products sold are product design and development costs. The
Company's product design and development activities generally involve the
modification and application of available technologies. Product design and
development costs are those costs typically associated with the Company's
cosmetic and feature design and testing of its products. The Company's product
design and development expenditures were approximately $220,000, $359,000,
$727,000 and $147,000 for the years ended December 31, 1995, 1996, 1997 and the
three months ended March 31, 1998, respectively.

The Company's selling expenses are composed of both variable expenses,
which generally correlate to sales levels, such as commissions, freight and
royalty expenses, and non-variable expenses, including customary selling
expenses and the cost of attendance at the annual Consumer Electronics Show and
other trade shows. Increases in royalty expenses accounted for the largest
portion of the increase in selling expenses in each of the last three years and
the three months ended March 31, 1998, except for the $4.3 million increase in
freight costs in 1997, which was primarily attributable to the Company's
decision to airfreight products to customers during the 1997 holiday season.
See "--1997 Compared to 1996."

General and administrative expenses include office and warehouse space and
administrative payroll, among other customary general and administrative
expenses. Increases in salary expenses due to an increase in the number of
employees as a result of the growth in operations accounted for the largest
portion of the increase in general and administrative expenses in each of the
last three years and the three months ended March 31, 1998.

The Company attempts to order products and maintain inventory controls to
minimize the costs and risks of inventory obsolescence and the retention of
significant inventories, both of which result in financing and other costs.
This inventory management strategy is frequently difficult to implement. Such
difficulty is increased by the relatively long product development and ordering
cycle, the unpredictability of consumer demand and the seasonal nature of the
Company's business. Most of the Company's sales take place in the third and
fourth quarters of the calendar year, and the Company must build its product
inventory well in advance of any sales of such inventory during the year-end
buying season. Although the Company does not have any backlog orders, its
customers typically provide monthly forecasts which are non-binding
commitments. For example, Kmart is required under the

23
<PAGE>

Kmart Agreement to provide such monthly forecasts. Maintaining inventory levels
to meet normal demands throughout the year is critical, given the Company's
capital requirements and limitations.

Historically, the Company's Hong Kong operations have generated net income
while its U.S. operations have generated losses from operations because the low
volume of sales in the United States were insufficient to cover the selling
expenses and general and administrative expenses of the Company's U.S.
operations. See Note 13 to the Consolidated Financial Statements. In addition,
U.S. operations would have generated net income in 1997 had the Company not
incurred approximately $4.3 million in additional freight costs due primarily
to its decision to airfreight products to customers during the 1997 holiday
season. See "--1997 Compared to 1996."

The Company's earnings in 1997 were from foreign operations where
generally the Company is not required to pay income taxes. U.S. income taxes
have not been provided on the undistributed earnings of these foreign
operations because the Company intends to reinvest these earnings in foreign
operations indefinitely.

The Company effected a 10,000-for-one stock split as of April 3, 1998 in
connection with the merger with and into the Company of one of its affiliates,
resulting in 10,000,000 shares of Common Stock outstanding. The shareholders
and their percentage ownership of the Company and such affiliate at the time of
the merger were identical. As a result, this transaction constituted a merger
of entities under common control and will be accounted for using the
pooling-like method of accounting.

CERTAIN RELATIONSHIPS.

Windmere-Durable, through its wholly-owned subsidiary Windmere, owns 50%
of the issued and outstanding Common Stock of the Company and 50% of the issued
and outstanding common stock of Salton. David Friedson, the Chairman, Chief
Executive Officer and President of Windmere-Durable, and Arnold Thaler, a
director and senior vice president of Windmere-Durable, are each directors of
the Company. Mr. Friedson and Harry Schulman, a senior vice president of
Windmere-Durable, are each directors of Salton. Salton and Windmere-Durable
have entered into an agreement pursuant to which Salton has the right to
purchase all of the shares of Salton common stock held by Windmere.
Windmere-Durable has announced that it has received notice from Salton
that Salton intends to close such purchase on July 27, 1998. Upon the
consummation of the purchase, Messrs. Friedson and Schulman will resign from
Salton's board of directors. However, there can be no assurance that Salton will
acquire any of the shares of Salton common stock held by Windmere. Pursuant to
such agreement, if Salton fails to consummate the purchase of such shares on or
prior to October 30, 1998, then Windmere will have the right to acquire all of
the shares of Salton common stock that it does not own. There can be no
assurance that Windmere will acquire any of the shares that it does not own.

The Company licenses the White-Westinghouse Trademark from WCI for use in
the sale of various audio, video and telecommunications products, as well as
portable microwave ovens, in the United States and Canada and licenses the
Philco trademark from WCI for use in the sale of portable microwave ovens in
the United States and Canada. See "Business--Brand Portfolio." The Company and
Kmart have entered into the Kmart Agreement pursuant to which the Company has
appointed Kmart as the exclusive "discount department store" to market and sell
audio, video and telecommunications products in the United States under the
White-Westinghouse Trademark. See "Business--Strategic Alliances." Salton
licenses the White-Westinghouse Trademark from WCI for use in the sale of
kitchen housewares, personal care products, fans, heaters and electrical air
cleaners and humidifiers in the United States and Canada. Salton has entered
into the Salton Agreement with Kmart pursuant to which Salton has appointed
Kmart as the exclusive "discount department store" for the sale of such
products in the United States under the White-Westinghouse Trademark.

The Company has two wholly-owned subsidiaries, Newtech (Hong Kong)
Limited, a Hong company, and Newtech Electronics Industries Limited, a Hong
Kong company ("NEIL"). In November 1997, NEIL acquired all of the outstanding
capital stock of Durable Electronics Industries Limited, a Hong Kong company
("DEI"), from Durable Electrical Metal Factory Limited, a Hong Kong company

24
<PAGE>

("DEM") which is wholly-owned by Windmere-Durable. DEI operates the Company's
PRC manufacturing facility. At the time of the acquisition, DEI was indebted to
DEM in the amount of approximately $6.2 million for loans to finance the
acquisition of certain fixed assets, capital expenditures and raw materials.
Windmere-Durable provides the Company with certain administrative services with
respect to the PRC manufacturing facility for a monthly management fee of
approximately $11,800. For example, pursuant to this arrangement,
Windemere-Durable or its affiliates purchase certain raw materials and other
goods and services and pay certain accounts payable and collect certain
accounts receivable on behalf of the Company and its subsidiaries, including
DEI. Amounts paid by Windmere-Durable or its affiliates on behalf of the
Company are reimbursed by the Company. See "Certain
Transactions--Windmere--Acquisition of PRC Manufacturing Facility from
Windmere."

ROYALTY PAYMENTS UNDER LICENSE AGREEMENTS.

WHITE-WESTINGHOUSE. The Company has an exclusive license from WCI to sell
consumer audio, video and telecommunications products in the United States and
Canada under the White-Westinghouse Trademark. The initial term of the
agreement is through December 31, 1998 and may be extended at the Company's
option for up to 14 one-year renewal terms through December 31, 2012. The
Company makes royalty payments to WCI equal to a percentage of the net invoice
value of the products sold by the Company under the agreement. In addition, the
Company must make minimum annual royalty payments to WCI, payable in quarterly
installments. Such minimum royalty payments total approximately $0.2 million
during the initial term and increase from a total of approximately $0.5 million
during the first renewal term to approximately $1.5 million during the
fourteenth renewal term. The royalty payments on the products sold by the
Company during the initial term have totaled approximately $3.3 million and
have exceeded the applicable minimums by more than 600%. See "Business--Brand
Portfolio--White-Westinghouse."

The Company also has an exclusive license from WCI to sell portable
microwave ovens in the United States and Canada under the White-Westinghouse
Trademark. The initial term of the agreement is through December 31, 2003 and
may be extended at the Company's option for up to six two-year renewal terms
through December 31, 2015. The Company makes royalty payments to WCI equal to a
percentage of the net invoice value of the products sold by the Company under
the agreement. In addition, the Company must make minimum annual royalty
payments to WCI, payable in quarterly installments commencing in the first
quarter of 1999. The aggregate of such payments under this license agreement
and the Philco license agreement described below total approximately $1.2
million during the initial term and increase from a total of approximately $1.0
million during the first renewal term to approximately $1.4 million during the
sixth renewal term. The royalty payments on the products sold by the Company
during the initial term have totaled approximately $17,000. See
"Business--Brand Portfolio--White-Westinghouse."

PHILCO. The Company has an exclusive license from WCI to sell portable
microwave ovens in the United States and Canada under the Philco brand name.
The initial term of the agreement is through December 31, 2003 and may be
extended at the Company's option for up to six two-year renewal terms through
December 31, 2015. The Company makes royalty payments to WCI equal to a
percentage of the net invoice value of the products sold by the Company under
the agreement. In addition, the Company must make minimum annual royalty
payments to WCI, payable in quarterly installments commencing in the first
quarter of 1999. The aggregate of such payments under this license agreement
and the White-Westinghouse license agreement for portable microwave ovens
described above total approximately $1.2 million during the initial term and
increase from a total of approximately $1.0 million during the first renewal
term to approximately $1.4 million during the sixth renewal term. The Company
commenced sales under this agreement in May 1998. See "Business--Brand
Portfolio--Philco."

25
<PAGE>

ADMIRAL. The Company has an exclusive license from Maytag Corporation to
sell audio and video products in most countries in the Caribbean, South and
Central America and Mexico under the Admiral brand name. The initial term of
the agreement is through December 31, 2003 and may be extended at the Company's
option for up to two five-year renewal terms through December 31, 2013,
provided certain performance goals have been achieved during the initial term
or the first renewal term, as the case may be. The Company makes annual royalty
payments to Maytag Corporation equal to a percentage of the adjusted gross
invoice price of the products sold by the Company under the agreement. In
addition, the Company must make minimum annual royalty payments to Maytag
Corporation. Such minimum royalty payments total approximately $2.3 million
during the initial term, approximately $7.0 million during the first renewal
term and approximately $10.0 million during the second renewal term. The
Company has made such minimum royalty payments in each year of the initial
term, which payments have totaled approximately $449,000. See "Business--Brand
Portfolio--Admiral."

TRADEMARK LITIGATION.

Pursuant to the Trademark Litigation, CBS seeks an injunction prohibiting
the Company, Salton and WCI from using the White-Westinghouse Trademark on
certain products and unspecified damages and attorney's fees. An adverse
decision could result in the Company being limited in further use of the
White-Westinghouse Trademark and in termination or significant modification of
the Kmart Agreement, any of which would have a material adverse effect on the
Company's business, financial condition and results of operations. The legal
costs that may be incurred in defending against this action could be
substantial; however, pursuant to an indemnification agreement among WCI, Kmart
and Windmere-Durable, WCI is defending and indemnifying Kmart and
Windmere-Durable for all costs and expenses for claims, damages and losses,
including the costs of litigation, and, pursuant to the license agreements with
WCI, WCI is defending and indemnifying Salton and the Company for all costs and
expenses for claims, damages and losses, including the costs of litigation. In
addition, the litigation could be protracted and result in diversion of
management and other resources of the Company. The Company believes that its
use of the White-Westinghouse Trademark does not infringe upon or otherwise
violate CBS's trademark rights. There can be no assurance that WCI will prevail
in its lawsuit or that WCI, the Company and their co-defendants will prevail in
their opposition to CBS's lawsuit. In the event that a favorable outcome for
the Company is not obtained, the Company intends to vigorously pursue its
rights under the license agreements described above, including the right to
indemnification, although there can be no assurance that the parties to the
license agreements will agree on the scope of the indemnity. See "Risk
Factors--Trademark Litigation" and "Business--Legal Proceedings."

26
<PAGE>

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net sales ................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of products sold ....................... 89.8 90.0 89.5 85.6 90.9
----- ----- ----- ----- -----
Gross profit ................................ 10.2 10.0 10.5 14.4 9.1
Selling expenses ............................ 6.4 3.3 5.1 6.5 4.4
General and administrative expenses ......... 8.6 4.7 2.2 10.3 5.1
Write-off of advances to affiliate .......... 0.0 2.5 0.0 0.0 0.0
----- ----- ----- ----- -----
Income (loss) from operations ............... ( 4.8) ( 0.5) 3.2 ( 2.4) ( 0.4)
Other (income) expense:
Interest expense ............................ 0.9 0.3 0.6 0.4 0.9
Interest expense--related party ............. 1.4 0.2 0.2 0.2 1.0
Interest and other income ................... ( 1.5) ( 0.8) ( 0.1) ( 0.2) ( 0.1)
Interest income--related party .............. 0.0 ( 0.7) ( 0.2) ( 1.2) ( 0.2)
----- ----- ----- ----- -----
Income (loss) before income taxes ........... ( 5.6) 0.5 2.7 ( 1.6) ( 2.0)
Income tax benefit .......................... 0.0 ( 0.3) ( 0.2) 2.4 0.7
----- ----- ----- ----- -----
Net income (loss) ........................... ( 5.6)% 0.8% 2.9% 0.8% ( 1.3)%
===== ===== ===== ===== =====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

NET SALES. Net sales increased $30.5 million, or 362.0%, from $8.4 million
for the three months ended March 31, 1997 to $39.0 million. For the three
months ended March 31, 1998, 78.5%, 2.3%, 18.2% and 1.0% of sales were
attributable to the White-Westinghouse, Admiral, Newtech and Craig brands,
respectively. The White-Westinghouse brand showed the largest increase from
$3.7 million for the three months ended March 31, 1997 to $30.3 million for the
three months ended March 31, 1998, primarily due to the increase in sales to
Kmart during such period as a result of the Kmart Agreement entered into in
January 1997. In September 1997, the Company obtained a license to sell
portable microwave ovens in the United States and Canada under the Philco brand
name, and in December 1997 the Company acquired the Craig trademark. The
Company commenced sales of various products under the Craig trademark in March
1998 and commenced sales of portable microwave ovens under the Philco brand
name in May 1998.

COST OF PRODUCTS SOLD AND GROSS PROFIT. Cost of products sold for the
three months ended March 31, 1998 increased $28.1 million, or 390.4%, from $7.2
million for the three months ended March 31, 1997 to $35.4 million for the
three months ended March 31, 1998, primarily due to the increase in the
Company's net sales as a result of the agreement entered into with Kmart in
January 1997. Gross profit as a percentage of net sales decreased from 14.4%
for the three months ended March 31, 1997 to 9.1% for the three months ended
March 31, 1998. The decrease was a result of $14.7 million in third-party sales
under the Kmart Agreement during the three months ended March 31, 1998. Gross
profit margins on such third-party sales are typically lower than those
resulting from domestic or import sales. See "--Overview and Highlights." No
third-party sales were made during the three months ended March 31, 1997.

SELLING EXPENSES. Selling expenses for the three months ended March 31,
1998 increased $1.2 million, or 218.4%, to $1.7 million, compared to $0.5
million for the three months ended March 31, 1997. Approximately $0.2 million
of such increase was due to a 200% increase in sales commissions from $0.1
million for the three months ended March 31, 1997 to $0.3 million for the three
months ended March 31, 1998. Royalty expenses for the three months ended March
31, 1998 increased by $0.4 million,

27
<PAGE>

or 400%, from $0.1 million for the three months ended March 31, 1997 to $0.5
million for the three months ended March 31, 1998 due to an increase in sales
of branded items on which royalties are payable.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $1.1 million, or 129.0%, from $0.9 million for the three months ended
March 31, 1997 to $2.0 million for the three months ended March 31, 1998. This
increase was attributable in part to an increase in salary expense of $0.2
million, or 35.0%, from $0.6 million for the three months ended March 31, 1997
to $0.8 million for the three months ended March 31, 1998 due to an increase in
the number of employees as a result of the growth in operations. In addition,
depreciation and amortization increased by $0.2 million, or 573%, from $31,000
for the three months ended March 31, 1997 to $0.2 million for the three months
ended March 31, 1998. This increase was a result of the acquisition of property
and equipment mainly for tooling for new products.

Total selling, general and administrative expenses as percentage of net
sales decreased from 16.8% for the three months ended March 31, 1997 to 9.5%
for the three months ended March 31, 1998.

INTEREST EXPENSE. Interest expense for the three months ended March 31,
1998 increased to $0.7 million from $0.1 million for the three months ended
March 31, 1997. The increase for the three months ended March 31, 1998 was
primarily the result of increased borrowings to finance the Company's
expansion.

INCOME TAX BENEFIT. The benefit for income taxes remained substantially
unchanged for the three months ended March 31, 1998 as compared to the three
months ended March 31, 1997.

1997 COMPARED TO 1996

NET SALES. Net sales increased $169.4 million, or 433.6%, from $39.1
million in 1996 to $208.4 million in 1997. During 1997, 78.4%, 5.1% and 16.6%
of sales were attributable to the White-Westinghouse, Admiral and Newtech
brands, respectively. The White-Westinghouse brand showed the largest increase
from $13.6 million in 1996 to $163.5 million in 1997, primarily due to the
increase in sales to Kmart during 1997 as a result of the Kmart Agreement
entered into in January 1997. In September 1997, the Company obtained a license
to sell portable microwave ovens in the United States and Canada under the
Philco brand name, and in December 1997 the Company acquired the Craig
trademark.

COST OF PRODUCTS SOLD AND GROSS PROFIT. Cost of products sold for 1997
increased $151.3 million, or 430.1%, from $35.2 million in 1996 to $186.4
million in 1997, primarily due to the increase in the Company's net sales as a
result of the agreement entered into with Kmart in January 1997. Gross profit
as a percentage of net sales increased from 10.0% in 1996 to 10.5% in 1997. The
slight improvement was a result of higher audio sales in 1997 ($66.6 million)
compared to 1996 ($29.8 million) which on average command higher gross margins
than video and third-party sales. This increase was partially offset by
third-party sales in 1997 ($79.1 million) which on average have lower gross
margins than audio and video sales. The Company had no third-party sales in
1996.

SELLING EXPENSES. Selling expenses for 1997 increased $9.2 million, or
719.7%, to $10.5 million, compared to $1.3 million in 1996. Approximately $4.5
million of such increase was due to freight costs. The Company incurred
approximately $4.3 million in additional freight costs due primarily to its
decision to airfreight products to customers during the 1997 holiday season.
The additional airfreight costs resulted mainly from delays in bringing
Company's PRC facility to required production levels. The Company does not
believe that its 1997 freight costs are indicative of future expenses, but
there can be no assurance that such delays will not occur in the future and
possibly result in increased airfreight costs. Prior to the Company's
acquisition of the facility, the Company had no experience operating a
manufacturing facility. In addition, the PRC manufacturing facility commenced
operations in early 1997 and at the time of the acquisition was not fully
on-line. The Company believes that its future success

28
<PAGE>

will depend in part upon its ability to bring the PRC facility fully on-line,
to operate the facility effectively and to integrate such manufacturing
operations with the other aspects of the Company's operations, including
product design and development, sales, distribution and marketing. Royalty
expenses for 1997 increased by $2.6 million, or 756.3%, from $0.3 million in
1996 to $2.9 million in 1997 as a result of the increase in sales of branded
items on which royalties are payable.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $2.8 million, or 149.5%, from $1.8 million in 1996 to $4.6 million in
1997. This increase was primarily attributable to an increase in salary expense
of $1.1 million, or 132.0%, from $0.8 million in 1996 to $1.9 million in 1997
due to an increase in the number of employees as a result of the growth in
operations.

Total selling, general and administrative expenses as a percentage of net
sales decreased from 8.0% in 1996 to 7.3% in 1997 (5.1% in 1997 excluding the
additional freight costs discussed above).

WRITE-OFF OF ADVANCES TO AFFILIATE. In 1996, the Company wrote off $1.0
million due from Newtech do Brazil, an affiliate of the Company which closed
its operations.

INTEREST EXPENSE. Interest expense for 1997 increased $1.6 million, or
774.9%, to $1.8 million, compared to $0.2 million in 1996. The increase in 1997
was primarily the result of increased borrowings to finance the Company's
expansion in 1997.

INCOME TAX BENEFIT. The benefit for income taxes increased from a benefit
of $0.1 million in 1996 to a benefit of $0.4 million in 1997 as a result of
losses incurred during 1997 by the Company's U.S. subsidiary. The Company's
earnings in 1997 were from foreign operations where generally the Company is
not required to pay income taxes. U.S. income taxes have not been provided on
the undistributed earnings of these foreign operations because the Company
intends to reinvest these earnings in foreign operations indefinitely.

1996 COMPARED TO 1995

NET SALES. Net sales increased $25.7 million, or 192.5%, from $13.4
million in 1995 to $39.1 million in 1996. During 1996, 62.9%, 34.8% and 2.3% of
net sales were attributable to the Newtech, White-Westinghouse and Admiral
brands, respectively. The Newtech brand showed the largest increase from $9.7
million in 1995 to $24.6 million in 1996. This increase was mainly attributable
to sales to Wal-Mart.

COST OF PRODUCTS SOLD. Cost of products sold for 1996 increased $23.2
million, or 193.3%, from $12.0 million in 1995 to $35.2 million in 1996. The
increase in cost of products sold was due to increases in the Company's net
sales.

SELLING EXPENSES. Selling expenses increased approximately $0.5 million,
or 52.0%, from $0.8 million in 1995 to $1.3 million in 1996. This increase was
primarily attributable to an increase in royalties of $0.3 million as a result
of sales of White-Westinghouse branded products.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.6 million, or 59.5%, from $1.2 million in 1995 to $1.8 million in
1996. This increase was primarily attributable to an increase in salary expense
of $0.3 million, or 68.5%, from $0.5 million in 1995 to $0.8 million in 1996
due to an increase in the number of employees as a result of growth in
operations.

Total selling, general and administrative expenses as a percentage of net
sales decreased from 15.0% in 1995 to 8.0% in 1996.

INTEREST EXPENSE. Interest expense decreased slightly from $0.3 million in
1995 to $0.2 million in 1996, primarily due to decreased borrowings.

INTEREST AND OTHER INCOME. Interest and other income increased $0.4
million from $0.2 million in 1995 to $0.6 million in 1996 as a result of
interest income earned by the Company on the promissory notes issued by
Windmere as part of its acquisition of 50% of the Company's stock.

29
<PAGE>

QUARTERLY FINANCIAL DATA

The following table sets forth certain unaudited quarterly statement of
operations data for each quarter of 1997 and the first quarter of 1998. This
data has been prepared by the Company on a basis consistent with the Company's
audited financial statements and includes all adjustments (consisting of normal
and recurring adjustments) that management considers necessary for a fair
presentation of the data. These quarterly results are not necessarily
indicative of future results of operations. This data should be read in
conjunction with the Consolidated Financial Statements and the related notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
1997 QUARTER ENDED 1998 QUARTER ENDED
------------------------------------------------------ -------------------
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31
---------- ----------- ---------- -------------- -------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net sales ................................. $ 8,420 $ 27,866 $ 84,628 $ 87,503 $38,900
Gross profit .............................. 1,210 3,372 7,822 9,580 3,542
Income (loss) from operations ............. (201) 1,877 4,172 1,005(1) (172)
Income (loss) before income taxes ......... (131) 1,919 3,761 123 (779)
Net income (loss) ......................... 70 1,480 3,043 1,429 (494)
</TABLE>

- ----------------
(1) Includes approximately $4.3 million of additional freight costs due
primarily to the Company's decision to airfreight products to customers
during 1997 holiday season. The additional freight costs resulted mainly
from delays in bringing the Company's PRC facility to required production
levels.

SEASONALITY

The Company's business is highly seasonal, with operating results varying
substantially from quarter to quarter. Approximately 82.5% of the Company's
sales in 1997 took place in the third and fourth quarters of the calendar year.
In order to facilitate sales during the year-end buying season, the Company
must make financial commitments and pay for product inventory and certain
expenses well in advance of any sales of such inventory. Typically, the Company
expects to experience lower profitability or losses in the first and second
quarters of each year for this reason. As a result, if the timing or amount of
customer orders fall below the Company's expectations, operating results and
cash flows would be materially adversely affected because expenses based on
these expectations will have already been incurred.

LIQUIDITY AND CAPITAL RESOURCES

The Company historically has met its operating cash needs by utilizing
borrowings from shareholders and credit arrangements.

CASH FLOWS FROM OPERATING ACTIVITIES. Net cash used by operating
activities was $27.9 million for the twelve months ended December 31, 1997.
During the twelve months ended December 31, 1996, operating activities provided
net cash of $1.5 million. Working capital changes utilized $34.5 million in
cash in 1997, primarily due to increases in accounts receivable and inventory,
partially offset by an increase in accounts payable and accrued expenses. Net
cash provided by operating activities was $4.6 million for the three months
ended March 31, 1998. During the three months ended March 31, 1997, operating
activities used $1.2 million in cash. Working capital changes provided $5.2
million in cash in the three months ended March 31, 1998, primarily due to
collections of accounts receivable partially offset by increases in inventory
and decreases in accounts payable. These changes resulted from a general
increase in the Company's business activity.

CASH FLOWS FROM INVESTING ACTIVITIES. Net cash used in investing
activities was $2.2 million and $0.4 million for the twelve months ended
December 31, 1997 and 1996, respectively. Substantially all of the $2.2 million
in 1997 was attributable to the purchase of property and equipment for the
Company's PRC manufacturing facility and the acquisition of the Craig
trademark. Net cash used in investing activities was approximately $563,000 and
$22,000 for the three months ended March 31, 1998 and 1997, respectively.
Substantially all of the $563,000 in the three months ended March 31, 1998 was
attributable to purchases of property and equipment mainly for tooling for new
products.

30
<PAGE>

CASH FLOWS FROM FINANCING ACTIVITIES. Net cash provided by financing
activities was $29.5 million and $1.1 million for the twelve months ended
December 31, 1997 and 1996, respectively. Net cash used in financing activities
for the three months ended March 31, 1998 was $3.9 million. During the three
months ended March 31, 1997 financing activities provided $48,000 in cash. Cash
used in financing activities during the three months ended March 31, 1998 was
primarily used to reduce borrowings under the Company's former credit facility.

The Company has a $105.0 million revolving credit facility with a group of
banks led by The National Bank of Canada to finance working capital
requirements, including trade finance activities. The facility includes a $2.0
million sub-facility for the issuance of standby letters of credit and a $10.0
million sub-facility for the creation of bankers' acceptances. The facility
terminates June 8, 2001 and is secured by substantially all of the Company's
assets. As of June 26, 1998, approximately $29.8 million was outstanding under
the facility. Under the facility the Company is required to comply with certain
financial covenants, including a debt to tangible net worth ratio (the
"Leverage Ratio"), a current ratio, an interest coverage ratio and a minimum
tangible net worth and is subject to limitations on capital expenditures and
capital and other distributions. Availability under the credit facility is
based on a formula of eligible receivables, inventories and letters of credit
issued by the Company. Availability based on accounts receivable ranges from
40% for unsecured foreign accounts receivable to 90% for accounts receivable
from certain customers that are secured by a standby letter of credit. As of
June 26, 1998, the Company had an additional $6.4 million available under the
credit facility. Interest on advances under the revolving credit is based on
the Company's Leverage Ratio. If the Leverage Ratio is less than 2.0 to 1.0,
then the Company may select The National Bank of Canada's prime rate or LIBOR
plus 2.15%. If the Leverage Ratio is equal to or greater than 2.0 to 1.0, then
the Company may select such prime rate or LIBOR plus 2.4%. The Company's
obligations under the credit facility are not guaranteed by any shareholder,
affiliate or other party.

On June 8, 1998, the Company used a portion of the funds available under
its credit facility to repay in full (i) all outstanding amounts under, and
terminate, its previous credit facility, (ii) a $2.0 million working capital
loan from Joel Newman, plus accrued and unpaid interest thereon, and (iii) an
aggregate of approximately $5.0 million in working capital loans from Windmere,
plus accrued and unpaid interest thereon. See "Certain Transactions."

The Company anticipates that the net proceeds from the Offering, cash
provided by operations and borrowings under credit facilities will be
sufficient to meet its liquidity requirements for the next 18 to 24 months. In
the event that the Company consummates an acquisition, its capital requirements
could increase; however, there are no present understandings, commitments or
agreements with respect to any future acquisition.

YEAR 2000 ISSUES. The Company has implemented a Year 2000 program to
ensure that its computer systems and applications will function properly beyond
1999. The Company believes that it has allocated adequate resources for this
purpose and expects its Year 2000 date conversion program to be completed
successfully on a timely basis. Although the ability of third parties with whom
the Company transacts business to address their Year 2000 issues is outside the
Company's control, the Company is discussing with its vendors and customers the
possibility of any interface difficulties which may affect the Company. The
Company currently does not expect the costs necessary to address this matter to
be material to its financial condition, results of operations or cash flows.

INFLATION

Inflation has not had a significant impact on the Company in the past
three years nor does the Company expect inflation to have a significant impact
in the foreseeable future.

31
<PAGE>

BUSINESS

GENERAL

Newtech Electronics Industries, Inc., established in 1990, designs,
sources, manufactures, and markets high-quality, value-priced brand-name
consumer electronic products. The Company offers a broad line of audio, video
and telecommunications products and selected home appliances, including
televisions, VCRs, home audio systems, CD players, cassette players, telephones
and portable microwave ovens. The Company's strategy has been to build a
portfolio of licensed and owned brand names, including White-Westinghouse,
Admiral, Philco, Craig, and Newtech. By having a portfolio of brand names, the
Company is able to offer retailers proprietary and flexible merchandising
programs. The Company currently sells its products to 15 retailers which
operate over 14,000 retail outlets in the United States and Canada, including
mass merchandisers such as Kmart and Wal-Mart, and other retailers, including
Family Dollar Stores, Ames, Rite-Aid and Zellers. In addition, the Company
sells its products to customers in Mexico, the Caribbean and Central and South
America. In January 1997, the Company entered into a long-term strategic
alliance with Kmart, pursuant to which the Company appointed Kmart as the
exclusive "discount department store" to market and sell a broad range of
audio, video and telecommunications products in the United States under the
White-Westinghouse Trademark. The agreement provides for minimum purchases by
Kmart of a total of $1.1 billion of White-Westinghouse brand consumer
electronic products in specified yearly increments over a seven-and-a-half-year
period. The Company believes that this strategic alliance provides a platform
for significant growth. See "-- Strategic Alliances." In large part due to this
alliance, from 1996 to 1997, net sales increased 433.6% to $208.4 million from
$39.1 million. The Company currently sells products to all other U.S. customers
through open purchase orders. The Company plans to grow its business by
expanding its customer base, acquiring and licensing additional brand names,
expanding the territories and product lines available under its existing
licenses, and increasing penetration of existing distribution channels.

THE CONSUMER ELECTRONICS INDUSTRY

The consumer electronics industry is large and diverse, encompassing a
wide variety of technologies and products, including televisions, VCRs, audio
systems, CD players, cassette players and telephones. CEMA estimates that total
factory sales to the U.S. market in 1997 included approximately $8.4 billion of
televisions (including TV/VCR combinations), $2.7 billion of VCRs, $1.7 billion
of audio systems, $4.3 billion of CD players (including portable and home CD
players), $0.3 billion of cassette players and $5.9 billion of telephones and
telephone answering devices. Industry participants have traditionally offered
such merchandise using three principal branding strategies and corresponding
price points: (i) premium brands, such as Sony and Panasonic; (ii) mass-market
brands, such as GE and Magnavox; and (iii) value-priced brands, such as
White-Westinghouse and GPX.

STRATEGY

OPERATING STRATEGY. The Company's operating strategy is based on the
following key elements:

32
<PAGE>

/bullet/ MAINTAIN LOW-COST, FLEXIBLE SOURCING AND MANUFACTURING
CAPABILITIES. The Company's products are manufactured both at the
Company's facility in the PRC and at various third-party facilities
throughout the world. The Company believes that its manufacturing facility
allows flexibility in sourcing products and a better understanding of
manufacturing cost and time parameters, which provide the Company with
leverage in negotiating with outside manufacturers.

GROWTH STRATEGY. The Company plans to continue to grow its business using
a strategy comprised of the following principal elements:

/bullet/ EXPAND ITS CUSTOMER BASE. The Company believes that it has
significant opportunities to increase the number of outlets at which its
products are sold. For example, in the second half of 1997, the Company
began selling products to Ames, Bradlees, Musicland and Heilig Meyers.
Also, the Company has recently received its first purchase order from
Zellers, a division of Hudson Bay Company, one of the largest retailers in
Canada. The Company plans to pursue additional proprietary strategic
alliances similar to its arrangement with Kmart, as well as other
merchandising programs.

/bullet/ ACQUIRE AND LICENSE ADDITIONAL BRAND NAMES. The Company plans to
continue to acquire and license additional brand names in order to
maximize its ability to provide retailers with proprietary and flexible
merchandising programs. Towards this end, in September 1997, the Company
obtained a license to sell portable microwave ovens in the United States
and Canada under the Philco brand name, the Company's first product
offering outside of the consumer electronics industry. In addition, in
December 1997, the Company acquired the Craig trademark, a well-recognized
brand name in the consumer electronics industry, under which the Company
sells a broad range of its audio, video and telecommunications products,
as well as portable microwave ovens. Although the acquisition of
additional brand names may require the expenditure of funds, the Company
believes that entering into new or modified license and distribution
agreements will not involve significant costs.

33
<PAGE>

PRODUCT LINES

The Company's business consists primarily of the design, sourcing,
manufacturing and marketing of high quality televisions, VCRs, audio equipment,
mobile audio products, auto sound equipment and radios in the value-priced
segment of the consumer electronics industry, as well as high quality, value-
priced portable microwave ovens. The Company also manufactures and sells a
variety of small consumer electronic products in the value-priced segment, such
as telephones, answering machines and clock radios. In 1996 and 1997, the
Company introduced approximately 40 and 128 new models, respectively. The
Company currently offers over 200 models of consumer electronic products and
portable microwave ovens. The Company typically offers the same product,
frequently with variations in design and features, under several brand names
and treats the same or similar products offered under different brand names as
separate models. The Company's products include the following:

PRODUCTS (NUMBER OF MODELS)

<TABLE>
<CAPTION>
HOME AND PORTABLE
TVS AND VCRS (46) AUTOMOTIVE AUDIO PRODUCTS (30) AUDIO PRODUCTS (120)
- -------------------------------- -------------------------------- --------------------------------------
<S> <C> <C>
/bullet/ Portable black and /bullet/ CD player radios with /bullet/ Home audio systems with
white TVs detachable face-plates single CD player
/bullet/ Portable color TVs /bullet/ Trunk mounted /bullet/ Home audio systems with
/bullet/ Color TVs with CD changers CD changer systems
remote control /bullet/ AM/FM cassette players, /bullet/ Portable AM/FM
/bullet/ TV/VCR combinations including those with cassette systems
/bullet/ VCRs detachable face-plates /bullet/ Portable CD systems with
/bullet/ Amplifiers detachable speakers
/bullet/ Speakers /bullet/ Portable CD stereo systems
/bullet/ Portable CD changer
stereo systems
/bullet/ Personal CD players
/bullet/ Personal cassette players
TELEPHONE PRODUCTS (37) MICROWAVE OVENS: (12) /bullet/ Personal sports electronics
- -------------------------------- -------------------------------- products designed for use
/bullet/ Corded and cordless /bullet/ Microwave ovens with when exercising or traveling
telephones rotary controls /bullet/ Portable radios
/bullet/ "Feature" telephones /bullet/ Microwave ovens with /bullet/ Electronic clock radios
/bullet/ Answering machines electronic touchpad controls /bullet/ Electronic clock radios
/bullet/ Combination telephone/ with CD players
answering machines /bullet/ Electronic clock radios with
/bullet/ Telephone clock radios cassette players
/bullet/ Hand-held microcassette
recorders
</TABLE>

34
<PAGE>

BRAND PORTFOLIO

The Company owns or licenses certain well-recognized brand names under
which it markets most of its products. These licenses are granted pursuant to
license agreements which generally provide for royalty payments based on the
value of the goods sold, minimum royalty amounts and sales of trademarked
products and generally prohibit the Company from entering into license
agreements for competing products. The key provisions of the Company's
principal license agreements are described below.

WHITE-WESTINGHOUSE

In May 1996, the Company entered into a trademark license agreement with
WCI which grants the Company the exclusive license to design, manufacture,
advertise, sell and promote consumer audio, video and telecommunications
products in the United States and Canada under the White-Westinghouse
Trademark. The initial term of the agreement is through December 31, 1998, and
may be extended at the Company's option for up to 14 one-year renewal terms
through December 31, 2012. WCI may, at its option, terminate the agreement
during a renewal term if certain minimum sales targets are not met. The
Company's sales under the agreement have exceeded the applicable targets by
more than 600% during the initial term. The Company makes royalty payments to
WCI equal to a percentage of the net invoice value of the products sold by the
Company under the agreement. In addition, the Company must make minimum annual
royalty payments to WCI, payable in quarterly installments. Such minimum
royalty payments total approximately $0.2 million during the initial term and
increase from a total of approximately $0.5 million during the first renewal
term to approximately $1.5 million during the fourteenth renewal term. The
royalty payments on the products sold by the Company during the initial term
have totaled approximately $3.3 million and have exceeded the applicable
minimums by more than 600%.

Pursuant to a separate agreement entered into in September 1997, WCI
granted the Company an exclusive license to design, manufacture, advertise,
sell and promote portable microwave ovens in the United States and Canada under
the White-Westinghouse Trademark. The initial term of this agreement is through
December 31, 2003 and may be extended at the Company's option for up to six
two-year renewal terms through December 31, 2015. WCI may, at its option,
terminate the agreement during a renewal term if certain minimum sales targets
are not met. The Company makes royalty payments to WCI equal to a percentage of
the net invoice value of the products sold by the Company under the agreement.
In addition, the Company must make minimum annual royalty payments to WCI,
payable in quarterly installments commencing in the first quarter of 1999. The
aggregate of such payments under this license agreement and the Philco license
agreement described below total approximately $1.2 million during the initial
term and increase from a total of approximately $1.0 million during the first
renewal term to approximately $1.4 million during the sixth renewal term. See
"--Strategic Alliances."

ADMIRAL

In October 1993, the Company entered into a trademark user agreement with
Maytag Corporation ("Maytag") and its wholly-owned subsidiary, Maytag
International, Inc., which grants the Company the exclusive license to
manufacture and sell audio and video products in most countries in the
Caribbean and South and Central America under the Admiral brand name. In
January 1997, the Company obtained the right to sell such products in Mexico
under the Admiral brand name. The initial term of the agreement is through
December 31, 2003, and may be extended at the Company's option for up to two
five-year renewal terms through December 31, 2013, provided certain performance
goals have been achieved during the initial term or the first renewal term, as
the case may be. The agreement may be extended for the first renewal term
provided that the Company's average royalty payments in 2001 and 2002 exceed
certain minimum levels. The Company makes annual royalty payments to Maytag
equal to a percentage of the adjusted gross invoice price of the products sold
by the Company under the agreement. In addition, the Company must make minimum
annual royalty payments to Maytag. Such

35
<PAGE>

minimum royalty payments total approximately $2.3 million during the initial
term, approximately $7.0 million during the first renewal term and
approximately $10.0 million during the second renewal term. The Company has
made such minimum royalty payments in each year of the initial term, which
payments have totaled approximately $449,000.

PHILCO

In September 1997, the Company entered into a trademark license agreement
with WCI which grants the Company the exclusive license to design, manufacture,
advertise, sell and promote portable microwave ovens in the United States and
Canada under the Philco brand name. The initial term of the agreement is
through December 31, 2003, and may be extended at the Company's option for up
to six two-year renewal terms through December 31, 2015. WCI may, at its
option, terminate the agreement during a renewal term if certain minimum sales
targets are not met. The Company makes royalty payments to WCI equal to a
percentage of the net invoice value of the products sold by the Company under
the agreement. In addition, the Company must make minimum annual royalty
payments to WCI, payable in quarterly installments commencing the first quarter
of 1999. The aggregate of such payments under this license agreement and the
White-Westinghouse license agreement for portable microwave ovens described
above total approximately $1.2 million during the initial term and increase
from a total of approximately $1.0 million during the first renewal term to
approximately $1.4 million during the sixth renewal term. The Company commenced
sales under this agreement in May 1998.

CRAIG

In December 1997, the Company purchased certain assets of Craig Consumer
Electronics, Inc. ("Craig"), consisting of the Craig trademark and a consumer
trade show booth. The Company now owns the registered trademark "Craig" and the
associated script logo. The Company sells a broad range of its audio, video and
telecommunications products, as well as portable microwave ovens, under the
Craig brand name.

NEWTECH

The Company has sold its products under the Newtech brand name since its
inception in 1990. The Company owns the registered trademark "Newtech" and the
associated script logo. See "Trademarks." The Company currently offers a broad
range of audio and video products, telephones and related products and portable
microwave ovens under the Newtech brand name.

STRATEGIC ALLIANCES

On January 27, 1997, the Company entered into the Kmart Agreement,
pursuant to which the Company appointed Kmart as the exclusive "discount
department store" to market and sell a broad range of audio, video and
telephone products in the United States under the White-Westinghouse Trademark.
The agreement prohibits the Company from granting the right to sell such
products under the White-Westinghouse Trademark to certain other "discount
department stores," mass merchandisers and specified retailers. The term
"discount department store" is defined in the Kmart Agreement as any of a
number of specified stores, including Best Buy, Circuit City, Dayton
Hudson/Target, Good Guys, Fred Meyer, Office Depot, Office Max, Sears, Service
Merchandise, Staples and Wal-Mart.The agreement does not prohibit the Company
from granting the right to sell such products outside the U.S., although the
Company only has a license to market and sell such products under the White-
Westinghouse Trademark in the U.S. and Canada. See "--Brand
Portfolio--White-Westinghouse."

The Kmart Agreement provides for minimum purchases by Kmart which increase
throughout its term from $135.0 million for the 18-month period ending June 30,
1998 to $171.0 million for the 12-month period ending June 30, 2004. During
1997 and the three months ended March 31, 1998, Kmart purchased approximately
$158.7 million and $28.9 million, respectively, of merchandise from the Company
pursuant to the Kmart Agreement, which accounted for approximately 76.0% and
74.0%,

36
<PAGE>

respectively, of the Company's net sales. Specified minimums apply to each of
the audio, video and telephone categories. The failure of Kmart to purchase the
minimum quantities requires the payment of 4.0% of the shortfall with respect
to video products and 5.0% for all other products. In the event that aggregate
U.S. retail sales in the consumer electronics industry for any particular
category decrease by more than 10% in any year from that sold in the prior
year, Kmart has the right to reduce the minimum purchase requirements to an
amount not less than 80% of the minimum for such period.

Kmart further has the right to procure the manufacture of products from
other manufacturers under the White-Westinghouse Trademark on behalf of the
Company, which procurements count toward its minimum purchase requirements. In
such cases, Kmart has the option of paying the purchase price to third-party
manufacturers directly or making such payment to the Company, in which case the
Company pays the third-party manufacturer. In addition, Kmart pays the Company
a percentage of such purchase price. The Kmart Agreement provides that in the
event Kmart fails to pay a third-party manufacturer, the Company must make the
payment. During 1997 and the three months ended March 31, 1998, Kmart purchased
approximately $79.1 million and $14.7 million, respectively, of merchandise
from third parties under the Kmart Agreement. Because the Company is
responsible for payment to the third-party manufacturer, the Company records
the price paid to the third-party manufacturer plus the percentage payable to
the Company as revenue and records the price paid to the third-party
manufacturer as the cost of products sold. Gross profit margins on these sales
are typically lower than those resulting from sales of the Company's own
products. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

The initial term of the Kmart Agreement is through June 30, 2004;
provided, however, that each of Kmart and the Company have the right, by
written notice given prior to June 30, 2000, to terminate the agreement without
cause any time after June 30, 2002. Should either party exercise such right,
the Company will, after July 31, 2001, have the right to sell the products
subject to the Kmart Agreement to any purchaser, including the "discount
department stores" prohibited under the agreement. Each of Kmart and the
Company further have the right to terminate the agreement without cause on June
30, 2003 and on each June 30 thereafter; in the case of the Company, such
termination requires 12 months' notice.

Kmart also has the right to terminate the agreement upon the termination
of the Salton Agreement with Kmart for the sale of kitchen housewares, personal
care products, fans, heaters and electrical air cleaners and humidifiers under
the White-Westinghouse Trademark. The termination provisions of the Salton
Agreement are substantially the same as the those of the Kmart Agreement. In
addition, Salton's license agreement with WCI for the sale of kitchen
housewares under the White-Westinghouse Trademark expires June 30, 1998, and
Salton's license agreement with WCI for the sale of personal care products,
fans, heaters and electrical air cleaners and humidifiers under the
White-Westinghouse Trademark expires December 31, 1998. Each such license
agreement may be extended for 13 one-year periods at the option of Salton,
provided that Salton meets certain minimum sales levels. In addition, either
party may terminate such license agreements without cause on 12 months' notice
beginning in 2001. Windmere-Durable has announced that Salton has
notified it of Salton's intention to exercise on July 27, 1998 a contractual
right to purchase all of the shares of Salton common stock owned by Windmere,
which constitute 50% of Salton's issued and outstanding shares of common stock.
Upon the consummation of the purchase, Windmere-Durable's nominees on Salton's
board of directors will resign. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Certain Relationships." The
Company has no control over the performance or termination of the Salton
Agreement with Kmart or Salton's license agreements with WCI. Furthermore, an
adverse decision in the Trademark Litigation could result in Salton being
limited in further use of the White-Westinghouse Trademark and in termination or
significant modification of the Salton Agreement. Windmere-Durable has
guaranteed the performance of both the Company and Salton under their respective
agreements with Kmart. Kmart also has the right to terminate the Kmart Agreement
on the basis of any claim which Kmart reasonably believes impairs or would
impair Kmart's ability to receive the benefits of the Kmart Agreement, whether
relating to any or all products. In the Trademark Litigation, CBS seeks, among
other things, a preliminary injunction enjoining the Company, Salton,
Windmere-Durable and WCI from using the White-Westinghouse Trademark in
connection with the sale of certain products, including products in

37
<PAGE>

categories representing 42.0% of the products sold by the Company to Kmart
under the Kmart Agreement in 1997. Although the Trademark Litigation was
pending prior to the execution of the Kmart Agreement, it is possible that the
Trademark Litigation may be viewed by Kmart as a claim which Kmart reasonably
believes impairs or would impair its ability to receive the benefits of the
Kmart Agreement. See "--Legal Proceedings" and "Risk Factors--Dependence on
Kmart Agreement."

In addition to its strategic alliance with Kmart, the Company has entered
into alliances with other customers for multi-year purchases of merchandise in
exchange for exclusivity in certain territories in Mexico, the Caribbean and
Central and South America. The Company plans to enter into other similar
merchandising programs. The Company believes that such strategic alliances are
responsive to the trend for major retailers to market and sell products under
proprietary brands.

PRODUCT DESIGN AND DEVELOPMENT

Value-priced consumer electronic products typically do not have unique or
innovative technical features. Competition in this segment is therefore more
dependent on product design, visual appeal and price. As such, the Company
recognizes that superior product design provides an important competitive
advantage. The Company has assembled an in-house design and engineering team
with significant industry experience and expertise for this purpose. The
Company believes that the superior design and style of its products distinguish
them from those of its competitors in the value-priced category and help drive
consumer purchasing decisions. The Company's in-house design and engineering
team conducts research activities relating to the improvement of existing
products and the development of new products. The design and engineering team
presently consists of approximately 10 employees, including engineers, product
designers, draftsmen and product managers, whose operations are supported by
approximately six outsourced engineers, designers and draftsmen, among others.

Management believes that the enhancement and extension of the Company's
existing products and the development of new product categories have
contributed significantly to the Company's growth to date and are necessary for
the Company's continued success and growth. The Company's product design and
engineering team evaluates new ideas and seeks to develop new products and
improvements to existing products to satisfy industry requirements and changing
consumer preferences. The Company selects design and manufacturing
specifications that adapt and implement available technology and features to
satisfy its customers' requirements for quality, product mix and pricing.
Company employees work closely with both retailers and suppliers to identify
trends in consumer preferences and to generate new product ideas. During 1996
and 1997, the Company introduced approximately 40 and 128 new product models,
respectively. The Company also regularly enhances existing products by adding
new features and modernizing their design in order to maintain their visual
appeal and competitiveness.

In addition, the Company highlights the design and style features of its
products with detailed descriptions and illustrations on packaging, which the
Company believes further distinguishes its products from those of its
competitors. The Company believes that this packaging strategy makes its
products more attractive to consumers as it facilitates an understanding of the
product features in retail locations where salespersons may not be available to
provide detailed explanations and demonstrations.

The product design and development process for products sold under
licensed brand names also involves product review by the relevant licensor for
purposes of quality control. Pursuant to the license agreements with WCI, prior
to any use of the White-Westinghouse or Philco brand names, the Company must
submit to WCI for its approval specimens of each of the Company's products
(including products supplied by third-party manufacturers under the Kmart
Agreement, see "--Strategic Alliances") and the related artwork, packaging,
advertising and promotional literature that the Company plans to use.
Thereafter, the Company must submit to WCI, at four-month intervals, production
run samples of each product. Pursuant to the license agreement with Maytag for
the Admiral brand name, the Company must submit to Maytag, upon request,
performance and failure data, as well as product samples for inspection and
testing. In addition, Maytag may from time to time inspect and test the
Company's facilities for compliance with quality standards.

38
<PAGE>

SOURCING AND MANUFACTURING

The Company is responsible for the final design and manufacturing
specifications of all of its products. Actual assembly, utilizing components
specified by the Company, is either performed at the Company's PRC
manufacturing facility or is outsourced to one of approximately 30 independent
manufacturers in accordance with specifications mandated by the Company. The
Company believes that its manufacturing facility allows flexibility in sourcing
products and a better understanding of the manufacturing cost and time
parameters, providing it with leverage in negotiating with such independent
manufacturers.

The Company purchased the Hong Kong corporation that owns its PRC
manufacturing facility from a subsidiary of Windmere-Durable in November 1997.
The facility is leased from the PRC government pursuant to a lease that expires
December 31, 2001. The Company currently utilizes the facility for the assembly
of audio products. The facility is approximately 182,700 square feet and
contains 18 assembly lines and is currently operated by approximately 1,300 of
the Company's employees. The facility typically employs up to 300 additional
workers during the third and fourth quarters of the calendar year when the
substantial majority of the Company's sales typically take place and production
is highest in order to fill customer orders. In 1997, this facility accounted
for approximately 7.1% of the Company's total product supply and 14.7% during
the three months ended March 31, 1998. The Company expects to source a higher
percentage of its products from this facility in 1998 than it did in 1997.
Prior to the Company's acquisition of the facility, the Company had no
experience operating a manufacturing facility. In addition, the PRC
manufacturing facility commenced operations in early 1997 and at the time of
the acquisition was not fully on-line. The Company believes that its future
success will depend in part upon its ability to bring the PRC facility fully
on-line, to operate the facility effectively and to integrate such
manufacturing operations with the other aspects of the Company's operations,
including product design and development, sales, distribution and marketing.
For example, in 1997, the Company incurred approximately $4.3 million of
freight costs due primarily to the Company's decision to airfreight products to
customers during the 1997 holiday season. Such additional airfreight costs
resulted mainly from delays in bringing the PRC facility to required production
levels. In addition, Windmere-Durable provides certain administrative services
for the factory from offices in Hong Kong for a monthly management fee of
approximately $11,800. See "Certain Transactions--Windmere."

During 1997, the Company's three largest independent manufacturers, which
are located in the PRC, Indonesia and Malaysia, respectively, supplied
approximately 36.0% of the Company's total products. The Company utilizes
additional manufacturers located in Indonesia, Malaysia, Mexico, Thailand, the
United States and the Philippines. The Company changes suppliers from time to
time as market conditions require. Substantially all of these suppliers
assemble products with components manufactured by third parties. The Company
believes that this is the standard method of operating and contracting for the
manufacture of products in the consumer electronics industry. During
production, the Company sends employees to the independent manufacturers'
facilities to monitor and facilitate timely manufacture and delivery of
products produced to the Company's specifications.

The Company considers its relationships with its independent manufacturers
and component suppliers to be good and believes that, absent extreme
circumstances affecting the supply of materials or the demand on manufacturing
time, the supply of products will be available when needed. The Company does
not maintain long-term purchase contracts with manufacturers and operates
principally on a purchase order basis. The Company believes that it is not
currently dependent on any single manufacturer for any of its products, and
that the loss of any one manufacturer would not have a long-term material
adverse effect on the Company because other independent manufacturers with
which the Company does business, as well as its own facility, would be able to
increase production to fulfill the Company's requirements. However, the loss of
a supplier or the Company's PRC facility could, in the short-term, materially
and adversely affect the Company's business until alternative supply
arrangements could be secured.

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<PAGE>

SALES, DISTRIBUTION AND MARKETING

The Company sells its products in the United States and Canada to mass
merchandisers such as Kmart and Wal-Mart, and to other retailers, including
Rite-Aid, Zellers and Ames. In addition, the Company markets and sells its
products in Mexico, the Caribbean and South and Central America, primarily
through independent distributors.

The Company has two marketing directors, one executive director of sales
and three vice presidents of sales. Two vice presidents of sales are
responsible for sales in various regions of North America, and the third is
responsible for all sales outside North America, principally South and Central
America and the Caribbean. The Company sells its products directly to certain
customers and indirectly through independent sales organizations that are paid
commissions based on the amount of their net sales.

The Company does not undertake any direct advertising. However, the
Company's retail customers place advertisements that generally promote the
Company's brand names in newspapers and other publications, catalogs, flyers,
and by display point-of-purchase advertising. The Company markets its products
at trade shows, including the Consumer Electronics Show held in Las Vegas,
Nevada in January of each year.

GEOGRAPHIC INFORMATION

The Company operates predominantly in a single industry: the design,
sourcing, manufacturing, and marketing of high-quality, value-priced brand-name
consumer electronic products. While the Company offers a wide range of items
for sale, many of them are manufactured at common production facilities and
marketed by a common sales force.

In addition to its U.S. operations, the Company has subsidiaries in Hong
Kong. All significant intercompany revenues and expenses are eliminated in
computing revenues and operating income.

Segment information by geographic area is as follows:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------------- ------------------------------
1995 1996 1997 1997 1998
-------------- -------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
UNITED STATES
Net sales ............ $ 2,254,301 $14,852,520 $129,530,298 $3,814,777 $24,952,395
Loss from operations (1,447,307) (378,375) (714,324) (785,449) (509,519)

HONG KONG
Net sales ............ 11,098,710 24,207,616 78,886,314 4,605,164 13,947,787
Income from
operations ............. 806,739 159,565 7,567,344 585,034 337,199
</TABLE>

Identifiable assets by geographic area are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ MARCH 31,
1996 1998
------------- 1997 --------------
<S> <C> <C> <C>
United States ......... $7,086,477 $51,667,843 $46,005,496
Hong Kong ............. 3,285,823 16,925,577 16,050,784
</TABLE>

CUSTOMERS

There is a limited number of potential customers that can achieve a broad
distribution of the Company's products. Moreover, the Company has been and is
highly dependent upon its largest customers and has derived and is expected to
derive a substantial percentage of its revenues from such

40
<PAGE>

customers. In particular, the Company's largest customer, Kmart, accounted for
approximately 76.0% and 74.0% of the Company's net sales during 1997 and three
months ended March 31, 1998, respectively. No other customer accounted for more
than 10% of the Company's net sales during 1997. In 1996, net sales to each of
the following customers represented more than 10% of the Company's net sales:
(i) Kmart represented 37%, (ii) Wal-Mart represented 34%, (iii) Sanyo do Brasil
represented 12%, and (iv) Family Dollar Stores represented 11%. The Company's
top five customers accounted for approximately 95%, 90% and 86% of net sales
during 1996, 1997 and the three months ended March 31, 1998, respectively. The
inclusion of even a single product in sales to a particular customer can
substantially increase the percentage of the Company's sales accounted for by
that customer. The Company believes that it has developed strong relationships
with its significant customers.

PRODUCT RETURNS AND WARRANTY CLAIMS

The Company's net sales represent gross sales after product returns and
warranty claims. Product returns and warranty claims result from defective
goods, inadequate performance relative to customer expectations, improper
packaging, liberal retailer return policies and other causes which are outside
the Company's control. For 1995, 1996, 1997 and the three months ended March
31, 1998, product returns and warranty claims approximated 3.8%, 0.8%, 1.6% and
2.3%, respectively, of gross sales. In 1995, 1996, 1997 and the three months
ended March 31, 1998, approximately 97.0%, 83.0%, 75.0% and 73.0%,
respectively, of the Company's gross sales were made under net sale
arrangements, whereby the Company's customers are responsible for product
returns, which cannot be returned to the Company. While the Company plans to
maintain or increase the percentage of sales that are on a net basis, there can
be no assurance that the Company will be successful in maintaining or
increasing such percentage.

AFTER-SALES SERVICE

After-sales service is an important competitive factor in the consumer
electronics industry. The Company believes that its combination of dedicated
in-house personnel and flexible outsourcing arrangements enables it to provide
responsive after-sales service at a reasonable cost to the Company. The Company
has contracted with a third party to administer its after-sales service,
including operating the toll-free phone system and providing the technical
support staff. The Company's after-sales service is made available to
customers, retailers and service centers through a toll-free, computerized
interactive phone system that (i) directs callers to independent local service
centers within their community, (ii) provides basic troubleshooting and general
product information and assistance for customers and retailers by trained
technical support staff, (iii) provides advanced technical support to customer
service centers in order to expedite customer repairs, (iv) takes orders for
parts 365 days a year, 24 hours a day, utilizing a world-wide network of
purchasing affiliates to offer competitive prices and (v) provides service
literature and handles consumer affairs calls and complaints. The Company pays
the service administrator a fee for each call handled. The Company's
after-sales service is available for both warranty product claims and
out-of-warranty product claims. Repairs covered by the Company's 90-day
warranty are billed to the Company, and out-of-warranty claims are paid by the
customer. In order to ensure the quality of after-sales service, the Company
regularly audits the service centers and phone system.

TRADEMARKS

The Company owns the United States registered trademark "Craig" and the
associated script logo. See "--Brand Portfolio--Craig." The Craig trademark has
also been registered, or a trademark application is pending, in more than 50
other countries. The Company believes that it has proprietary protection for
the Craig trademark in most foreign countries in which the Company currently
sells Craig products or plans to do so in the future. The Company owns the
United States registered trademark "Newtech" and plans to register the Newtech
trademark in the foreign countries in which the Company currently sells Newtech
products or plans to do so in the future.

41
<PAGE>

REGULATION

The Company is also subject to numerous tariffs, duties, charges and
assessments on the import of its various products. The Company retains import
agencies and expediters to facilitate the import of its products and the
payment of these charges and duties. Although these duties and charges have not
substantially affected the Company's ability to market its products for
delivery in the United States and elsewhere, regulations affecting these
charges and duties are subject to change, which could have the effect of
increasing the cost of goods imported and sold by the Company. Currently,
because certain of the Company's products are manufactured in the PRC, the
continual designation of MFN Status for the PRC pursuant to treaties with the
United States and stable diplomatic relations with the PRC are critical to the
ongoing and continuous supply of products. Additional regulation implemented in
the United States or elsewhere could also limit the ability to manufacture,
transport, or import goods.

COMPETITION

The consumer electronics industry is extremely competitive and is
dominated by large and well-capitalized companies. The Company competes with
the entire consumer electronics industry for consumer dollars, shelf space for
products and sales support. The Company's competitors may not rely on external
financing or relationships with independent manufacturers to the same extent as
the Company. Furthermore, the Company's competitors may have cost advantages
depending on labor costs, currency exchange rates and other factors in the
countries where their manufacturing operations take place, relative to the
countries where the Company's products are manufactured. The Company has
adopted a marketing strategy that targets the value-priced segment of the
consumer electronics market, which is particularly price sensitive. There is
competition among a number of brands in this market segment, including Emerson
and GPX. In addition, although Magnavox, GE, Sony and Panasonic brand products
are not currently emphasized in the value-priced segment of the market, they do
compete with the Company's products for consumer dollars, shelf space and sales
support. To the extent that these brands compete directly with the Company's
brands on the basis of price, or their product prices were otherwise reduced,
the Company's ability to market and sell competitive products could be severely
affected, which would have a material adverse effect on the Company's business,
financial condition and results of operations.

EMPLOYEES

As of May 30, 1998, the Company had a total of approximately 1,400
full-time employees. Among these employees, approximately 50 were located in
the United States, including approximately 45 at the Company's Miami, Florida
headquarters, approximately 25 were located in Hong Kong, and approximately
1,325 were located in the PRC, including approximately 1,300 employees who work
at the Company's manufacturing facility in Shenzhen in the Province of
Goangzau. The facility typically employs up to 300 additional employees during
the third and fourth quarters of the calendar year when the substantial
majority of the Company's sales typically take place and production is highest
in order to fill customer orders. The Company believes that its relationships
with its employees are good. The Company is not party to any collective
bargaining agreement, nor is the Company aware of any effort to organize
employees of the Company into any union or similar labor organization.

42
<PAGE>

LEGAL PROCEEDINGS

In November 1996, WCI filed suit for injunctive relief and damages against
Westinghouse Electric Corporation (now known as CBS Corporation) in the United
States District Court for the Northern District of Ohio alleging that CBS's
grant of licenses to the Westinghouse trademark for use on lighting products,
fans and electrical accessories for use in the home violates WCI's rights to
the Westinghouse trademark and constitutes a breach of the agreements under
which CBS's predecessor sold WCI its appliance business and certain trademark
rights in 1975. In response to that suit, CBS filed a related action in
December 1996 in the United States District Court for the Western District of
Pennsylvania, naming WCI, the Company, Windmere-Durable, Salton and certain
other parties as defendants. The two actions have now been consolidated in the
Pennsylvania court. CBS's complaint alleges among other things that WCI's
license to the Company to use the White-Westinghouse Trademark on CD players,
audio systems that include CD players, VCRs, TV-VCR combinations, headphones,
and telephones, telephone answering machines and telephone accessories
infringes its right to the Westinghouse trademark. CBS does not appear to be
challenging the validity of the Company's license to use the mark on TVs
without VCRs, on radios, on audio systems or cassette tape players that do not
include CD players, on stereo speakers or on microwave ovens. CBS seeks an
injunction prohibiting the Company, Salton and WCI from using the
White-Westinghouse Trademark on products not specifically enumerated in the
transaction documents, and unspecified damages and attorneys' fees. An adverse
decision in the Trademark Litigation could result in the Company being limited
in further use of the White-Westinghouse Trademark and in termination or
significant modification of the Kmart Agreement, any of which would have a
material adverse effect on the Company's business, financial condition and
results of operations. The legal costs that may be incurred in defending
against this action could be substantial; however, pursuant to an
indemnification agreement dated January 23, 1997 by and among WCI, Kmart and
Windmere-Durable, WCI is defending and indemnifying Kmart and Windmere-Durable
for all costs and expenses for claims, damages and losses, including the costs
of litigation, and, pursuant to the license agreements with WCI, WCI is
defending and indemnifying Salton and the Company for all costs and expenses
for claims, damages and losses, including the costs of litigation. In addition,
the litigation could be protracted and result in diversion of management and
other resources of the Company. The Company believes that its use of the
White-Westinghouse Trademark does not infringe upon or otherwise violate CBS's
trademark rights. There can be no assurance that WCI will prevail in its
lawsuit or that WCI, the Company and their co-defendants will prevail in their
opposition to CBS's lawsuit. In the event that a favorable outcome for the
Company is not obtained, the Company intends to vigorously pursue its rights
under the license agreements described above, including the right to
indemnification, although there can be no assurance that the parties to the
license agreements will agree on the scope of the indemnity.

Related proceedings have also been commenced before the Trademark Board of
the United States Patent and Trademark Office in opposition to WCI's and CBS's
efforts to register certain uses of the Westinghouse and White-Westinghouse
trademarks. Although the Company is not a party to those proceedings, some of
them relate to the Company's uses of the White-Westinghouse Trademark. Those
proceedings have been stayed pending resolution of the Trademark Litigation in
the Pennsylvania court. Even if the Trademark Litigation is resolved, it is
possible that these proceedings before the Trademark Board will continue and
will have a material adverse effect upon the Company's business, financial
condition and results of operations.

The Company is not currently a party to any other pending legal
proceedings, the adverse outcome of which, individually or in the aggregate,
would have a material adverse effect on the business, financial condition or
results of operations of the Company. The Company is from time to time involved
in various legal proceedings, including collection matters and disputes over
product defects, individual employment disputes, and similar matters. The
Company maintains insurance to attempt to insure against liability associated
with a product defect. However, to the extent that any such defect were
pervasive in any particular product or line of products, the Company could be
required to undertake to recall those products or could be subject to
significant exposure with respect to the institution of legal proceedings.

43
<PAGE>

FACILITIES

The Company's main office and administrative facilities (as well as
additional warehouse space) are located in approximately 13,700 square feet of
space in Miami, Florida. The Company's lease for this space expires on December
31, 1999 and may be extended at the option of the Company for two one-year
renewal terms. Rent under the lease is $8,000 per month. The Company also
leases approximately 6,730 square feet of office space in Hong Kong, which
contains a showroom and product development facilities. The Company's lease for
this space expires on October 12, 1999. Rent under the lease is approximately
$5,700 per month. The Company leases an approximately 182,700 square foot
manufacturing facility located in Shenzhen in the Province of Goangzau in the
PRC. The facility is leased from the PRC government pursuant to a lease that
expires December 31, 2001. Rent under the lease is approximately $278,000 per
year. The PRC facility currently manufacturers audio products and contains 18
assembly lines.

44
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY PERSONNEL

The executive officers, directors and other key personnel affecting the
Company's operations are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------- ----- ----------------------------------------------------------
<S> <C> <C>
Joel Newman ................. 48 Chairman of the Board, President, Chief Executive Officer
and Director
Hatch Masuda ................ 58 Senior Vice President, Design and Product Development
Ichiro Okamoto .............. 51 Vice President, Overseas Operations and
Managing Director--Hong Kong
Leonor Schuck ............... 38 Vice President, Finance and Chief Financial Officer
Stuart Slugh ................ 43 Vice President, Engineering and After-Sales Service
Vivian Hernandez ............ 48 Vice President, Administration
Barry Light ................. 39 Director of Marketing
Alejandro Ricardes .......... 40 Vice President, Sales--Caribbean, Europe and
Latin America
Terry Arf ................... 49 Vice President, Sales--West Coast
David M. Friedson ........... 41 Director
Arnold Thaler ............... 59 Director
Noel Shapiro ................ 70 Director
</TABLE>

The Company's Board of Directors intends to appoint at least two
additional directors who are not affiliated with the Company within 90 days of
the consummation of the Offering.

JOEL NEWMAN has been the Chairman of the Board, President and Chief
Executive Officer of the Company since its inception in 1990. In 1978, Mr.
Newman formed Cosmo Communications Corp. ("Cosmo"), a distributor and
manufacturer of clocks and consumer electronic products, where he served as
Chairman and Chief Executive Officer until he sold his interest in Cosmo in
1986. Mr. Shapiro, a Director of the Company, is Mr. Newman's father-in-law.

HATCH MASUDA has been Senior Vice President, Design and Product
Development of the Company since 1996. Prior to that, since 1995 Mr. Masuda
served as the Company's Vice President, Design and Product Development. From
1979 through 1995, Mr. Masuda worked as Vice President, Design and Product
Development at Emerson Radio Corp.

ICHIRO OKAMOTO has been Vice President, Overseas Operations of the Company
since 1996 and Managing Director--Hong Kong since 1995. Prior to joining the
Company, Mr. Okamoto served as Director of Engineering at Emerson Radio Corp.
in Hong Kong from 1994 to 1995, as Managing Director of Yorx Corp. in Hong Kong
from 1993 to 1994 and as General Manager of Emerson's Tokyo Office from 1986 to
1993.

LEONOR SCHUCK has been Vice President, Finance and Chief Financial Officer
of the Company since 1995. From 1991 to 1995, Ms. Schuck served as the Chief
Financial Officer of Bijoux Terner, L.P., a costume jewelry wholesaler. Prior
to that, Ms. Schuck worked at Ernst & Young LLP for nine years, the last two
years as Senior Manager. Ms. Schuck is a certified public accountant.

STUART SLUGH has been Vice President, Engineering and After-Sales Service
of the Company since 1996, after working in the same capacity at Emerson Radio
Corp. since 1983.

VIVIAN HERNANDEZ has been Vice President, Administration of the Company
since 1997. Prior to that, from 1991 to 1997, Ms. Hernandez served as Sales
Administrator of the Company.

BARRY LIGHT has been Director of Marketing of the Company since 1997.
Prior to joining the Company, Mr. Light held the same position at Emerson Radio
Corp. since 1993. Prior to that, Mr. Light worked at Sharp Electronics
Corporation as Product Marketing Manager for Audio from 1989 to 1993.

45
<PAGE>

ALEJANDRO RICARDES has been Vice President, Sales--Caribbean, Europe and
Latin America since 1995. Prior to joining the Company, Mr. Ricardes held
several managerial positions in sales at Philco Argentina, Panasonic Chile, and
Kelvinator Argentina.

TERRY ARF has been Vice President, Sales--West Coast of the Company since
1997. Prior to joining the Company, Mr. Arf held several sales and management
positions over the past 20 years in the consumer electronics industry with
various companies, including Craig Consumer Electronics, Inc., Ryka Inc. and
Musicland.

DAVID M. FRIEDSON has served as a Director of the Company since 1996. Mr.
Friedson has served as Chairman of the Board of Windmere-Durable since April
1996, Chief Executive Officer of Windmere-Durable since January 1987 and as
President of Windmere-Durable since January 1985.

ARNOLD THALER has served as a Director of the Company since 1996. Mr.
Thaler has served as a Senior Vice President of Windmere-Durable since February
1996 and has served as an Executive Vice President--Product Development,
Engineering and Manufacturing of Windmere-Durable since December 1988.

NOEL SHAPIRO has served as a Director of the Company since its inception
in 1990. Mr. Shapiro has served as president of Star Ranch Enterprises Inc., an
agricultural and investment company, since 1972 and has served as president of
Arrow Construction Corporation, a construction and real estate development
company, since 1965. Mr. Shapiro is the father-in-law of Mr. Newman.

CONSULTANTS

Pursuant to a consulting agreement with Venture Marketing, Inc., the
Company is provided with the full time services of two sales consultants.
Robert Winer is the sole shareholder of Venture Marketing, Inc. and serves in a
capacity equivalent to the Company's Executive Vice President, Sales--North
America. Mr. Winer has provided these services since 1996. Prior thereto, Mr.
Winer served as Executive Vice President of Sound Design Corp.--GDI
Technologies for 18 years. Stewart Katz serves in a capacity equivalent to the
Company's Vice President, Sales--East Coast. Mr. Katz has provided these
services since 1996. For the prior 20 years, Mr. Katz held several sales and
management positions in the consumer electronics industry with various
companies, including Emerson Radio Corp. and Yorx Corp. The Company pays
Venture Marketing, Inc. for the services of Messrs. Winer and Katz based on a
commission structure with respect to net sales. In 1997, the Company paid
Venture Marketing, Inc. a total of $120,000 in commissions.

DIRECTORS COMPENSATION

The Company does not currently pay any fees to directors. The Company
intends to pay each director who is not an employee of the Company, Windmere or
Windmere-Durable an annual director's retainer of $10,000 and $1,000 for each
meeting of the Board, including committee meetings, attended by the director
after the consummation of the Offering. The Company also reimburses, and
intends to continue to reimburse, all directors for all travel-related expenses
incurred in connection with their activities as directors.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors intends to establish, within 90 days
after the consummation of the Offering, an Audit Committee and a Compensation
Committee, each of which will be composed of the two unaffiliated directors
that the Board intends to appoint during such period. The Audit Committee will
be responsible for reviewing audit functions, including accounting and
financial reporting practices of the Company, the adequacy of the Company's
system of internal accounting control, the quality and integrity of the
Company's financial statements and relations with independent auditors. The
Compensation Committee will be responsible for establishing the compensation of
the Company's directors, officers and employees, including salaries, bonuses,
commission, and benefit plans, administering the Company's stock option plans
and other matters relating to compensation.

46
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by the Company during
1997 to the Chief Executive Officer and the other four most highly paid
executive officers who were serving as executive officers at the end of 1997
(collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------ -------------
NUMBER OF
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION SALARY($) BONUS($) OPTIONS
- ------------------------------------------------------- ----------- ---------- -------------
<S> <C> <C> <C>
Joel Newman, Chairman, President and
Chief Executive Officer ............................. $400,000 $236,147 175,000
Hatch Masuda, Senior Vice President, Design and
Product Development ................................. 193,236 63,294 125,000
Ichiro Okamoto, Vice President, Overseas Operations and
Managing Director--Hong Kong ........................ 105,384 30,000 60,000
Stuart Slugh, Vice President, Engineering and
After-Sales Service ................................. 110,000 4,135 45,000
Leonor Schuck, Vice President, Finance and
Chief Financial Officer ............................. 88,462 10,828 60,000
</TABLE>
- ----------------
(1) The columns for "Other Annual Compensation" and "All Other Compensation"
have been omitted because there is no compensation required to be reported
in such columns. The aggregate amount of perquisites and other personal
benefits provided to each Named Executive Officer is less than 10% of the
total annual salary and bonus of such officer.

OPTION GRANTS, EXERCISES AND FISCAL YEAR-END VALUES

The following table sets forth information with respect to grants of
options to purchase shares of Common Stock during the fiscal year ended
December 31, 1997 to the Named Executive Officers. The amounts shown as
potential realizable values on the options are based on assumed annualized
rates of appreciation in the price of the Common Stock of 5% and 10% over the
term of the options, as set forth in rules of the Securities and Exchange
Commission. Actual gains, if any, on stock option exercises are dependent on
future performance of the Common Stock. There can be no assurance that the
potential realizable values reflected in this table will be achieved.

STOCK OPTION GRANTS IN THE FISCAL YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
PERCENT OF APPRECIATION FOR OPTION
NUMBER OF TOTAL OPTIONS TERM(1)
SECURITIES GRANTED TO EXERCISE OF ----------------------------
UNDERLYING EMPLOYEES IN BASE PRICE
NAME OPTIONS GRANTED FISCAL YEAR ($/SHARE) EXPIRATION DATE 5%($) 10%($
- ------------------------ ----------------- -------------- ------------ ------------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Joel Newman ............ 175,000 27.0% $ 2.00 February 28, 2007 $ 285,058 453,898
Hatch Masuda ........... 125,000 19.3 2.00 February 28, 2007 157,225 398,425
Ichiro Okamoto ......... 60,000 9.2 2.00 February 28, 2007 75,468 191,244
Stuart Slugh ........... 45,000 6.9 2.00 February 28, 2007 56,601 143,433
Leonor Schuck .......... 60,000 9.2 2.00 February 28, 2007 75,468 191,244
</TABLE>
- ----------------
(1) The Company determined that the Common Stock had a fair market value of
$2.00 on the date of grant.

The following table sets forth data concerning the value of unexercised
options as of December 31, 1997 held by the Company's Named Executive Officers.
No options were exercised during fiscal 1997.

47
<PAGE>

YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(1)
- ------------------------ ------------- --------------- ------------- -----------------
<S> <C> <C> <C> <C>
Joel Newman ............ -- 175,000 -- 350,000
Hatch Masuda ........... -- 125,000 -- 250,000
Ichiro Okamoto ......... -- 60,000 -- 120,000
Stuart Slugh ........... -- 45,000 -- 90,000
Leonor Schuck .......... -- 60,000 -- 120,000
</TABLE>

- ----------------
(1) The Company determined that the Common Stock had a fair market value of
$4.00 per share on December 31, 1997.

EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

The Company has entered into employment agreements with each of Joel
Newman, Hatch Masuda and Leonor Schuck. The employment agreement with Mr.
Newman provides for his employment as the Chairman, Chief Executive Officer and
President of the Company with a base salary of $475,000 per year, to be
increased annually by a percentage equal to the increase in the consumer price
index. The employment agreement with Mr. Masuda provides for his employment as
the Company's Senior Vice President, Design and Product Development with a base
salary of $192,000 per year, to be increased annually by a percentage equal to
the increase in the consumer price index. The employment agreement with Ms.
Schuck provides for her employment as the Company's Vice President, Finance and
Chief Financial Officer with a base salary of $110,000 per year, to be
increased annually by a percentage equal to the increase in the consumer price
index.

The term of each employment agreement commences on the date of the
consummation of the Offering (the "Commencement Date") and continues until the
second anniversary thereof, provided that on the first and each subsequent
anniversary of the Commencement Date, such term will automatically be extended
for one additional year. Except for termination for cause, each agreement may
only be terminated by the giving of notice on , or not more than 60 days prior
to, an anniversary of the Commencement Date by either party of its intention
not to extend the agreement beyond the remaining two years of the term. Each
agreement provides that upon the employee's death, the Company will pay to his
or her estate a sum equivalent to one year's base salary. The Company may
terminate each employee's employment in the event of his or her disability for
a period of 360 consecutive days or more, which termination is effective one
year from the date of notice of such termination by the Company. Upon a change
in control of the Company (as defined in each agreement), each employee has the
option of terminating his or her employment agreement immediately upon notice
to the Company, in which event (i) all of the stock options held by such
employee will be immediately exercisable and the stock of the Company acquired
pursuant to such exercise may be sold subject to no restrictions by the Company
(other than those imposed by federal and state securities laws), and (ii) the
Company will pay to the employee at the time of such termination a lump sum
equal to three times such employee's base salary for the fiscal year in which
such termination occurs.

STOCK OPTION PLAN

Under the Company's 1997 Stock Option Plan (the "Plan"), which became
effective as of February 28, 1997, 1,000,000 shares of Common Stock are
reserved for issuance upon exercise of stock options granted under the Plan.
The Plan is designed as a means to attract and retain qualified and competent
persons who provide services to the Company and its subsidiaries. The Board of
Directors, or a committee (the "Committee") of two or more non-employee
directors appointed by the Board of Directors, will administer and interpret
the Plan. The Board of Directors and the Committee each shall be authorized to
grant options thereunder to all eligible employees, directors (whether or not
also employees of the Company or any of its subsidiaries), consultants and
independent contractors of the Company or its subsidiaries. In the event of a
change in the Common Stock due to a stock dividend or recapitalization, the
Plan provides for appropriate adjustment in the number of shares available for

48
<PAGE>

grant under the Plan and the number of shares and the exercise price per share
under any option then outstanding under the Plan, so that the same percentage
of the Company's issued and outstanding shares shall remain subject to being
optioned under the Plan or subject to purchase at the same aggregate exercise
price under any such outstanding option, as applicable. Unless otherwise
provided in any option, the Committee or the Board of Directors may change the
option price and/or number of shares under any outstanding option when, in
their discretion, such adjustment becomes appropriate so as to preserve but not
increase benefits under the Plan. The aggregate number of shares subject to
options granted to any one optionee under the Plan may not exceed 400,000
subject to adjustment as described above. However, no incentive stock options
(as defined in Section 422 of the Internal Revenue Code) may be granted to a
person who is not also an employee of the Company or a subsidiary.

The Plan provides for the granting of both incentive stock options and
nonqualified stock options. Options may generally be granted under the Plan on
such terms and at such prices as determined by the Committee or the Board of
Directors, except that the per share exercise price of any incentive stock
options cannot be less than the fair market value of a share of the Common
Stock on the date of grant. Each option is exercisable after the period or
periods specified in the option agreement, but no option may become exercisable
after the expiration of ten years from the date of grant. The Board of
Directors or Committee may in its sole discretion accelerate the exercisability
or vesting of any option or shares previously acquired by the exercise of any
options (including, without limitation, in the event of a change in control, as
defined in the Plan). Incentive stock options granted to an individual who owns
(or is deemed to own) at least 10% of the total combined voting power of all
classes of stock of the Company or any of its subsidiaries must have an
exercise price of at least 110% of the fair market value of the Common Stock
subject to such option on the date of grant and a term of no more than five
years. Incentive stock options granted under the Plan are not transferable
other than by will or by the laws of descent and distribution. Nonqualified
stock options are also not transferable unless the prior written consent of the
Committee or the Board of Directors is obtained and such transfer does not
violate Rule 16b-3 under the Securities Exchange Act of 1934. Unless otherwise
provided in any option, and subject to such guidelines as the Committee or the
Board of Directors may establish, the option price may be paid by cash,
certified or official bank check, personal check if accepted by the Committee
or the Board of Directors, money order, shares of Common Stock, withholding of
shares of Common Stock, any cashless exercise procedure approved by the
Committee or the Board of Directors, other consideration deemed appropriate by
the Committee or the Board of Directors, or a combination of the above. The
Plan also authorizes the Company to make or guarantee loans to optionees to
enable them to exercise their options. Such loans must (i) provide for recourse
to the optionee, (ii) bear interest at the prime rate of the Company's
principal lender, (iii) be secured by the shares of Common Stock purchased, and
(iv) contain such other terms as the Committee or the Board of Directors in its
sole discretion shall reasonably require. The Board of Directors or the
Committee has the authority to amend or terminate the Plan or any options,
provided that no such action may substantially impair the rights or benefits of
the holder of any outstanding option without the consent of such holder, and
provided further that certain amendments to the Plan are subject to shareholder
approval. Unless terminated sooner, the Plan will continue in effect until all
options granted thereunder have expired or been exercised, provided that no
options may be granted after February 28, 2007.

Options granted under the Plan will be exercisable in accordance with the
option agreement executed in connection with such grant. The Company has
granted options under the Plan to purchase an aggregate of 649,000 shares of
Common Stock to 34 employees. Options to purchase 618,700 shares of Common
Stock were granted to 21 employees on February 28, 1997 and remain outstanding
on the date hereof. Options to purchase 29,900 shares of Common Stock were
granted to 12 employees on October 27, 1997 and remain outstanding on the date
hereof. Options to purchase 400 shares of Common Stock were granted to two
employees on November 30, 1997, and remain outstanding on the date hereof. One
fifth of the options held by each employee vest on each anniversary of the
grant thereof. Notwithstanding the foregoing schedule, the option agreements
prohibit the exercise of any of the options or the sale or other disposition of
any shares of Common Stock acquired pursuant to the

49
<PAGE>

exercise of such options for a period of 180 days after the date of this
Prospectus without the prior written consent of the Underwriters.

CERTAIN TRANSACTIONS

WINDMERE

INITIAL WINDMERE INVESTMENT. In April 1996, the Company issued 5,000,000
shares of Common Stock to Windmere in exchange for (i) $3.0 million in cash,
(ii) an 8% unsecured subordinated promissory note of Windmere due April 15,
1998 in the aggregate principal amount of $3.0 million, (iii) an 8% unsecured
subordinated promissory note of Windmere due April 15, 2001 in the aggregate
principal amount of $2.0 million (together with the 8% subordinated promissory
note in (i) above, the "Windmere Notes") and (iv) an 8% unsecured convertible
subordinated promissory note of Windmere due April 15, 2001 in the aggregate
principal amount of $2.0 million (the "Windmere Convertible Note"). The Company
assigned the Windmere Convertible Note to certain holders of its debt in
exchange for the repayment in full of such indebtedness. Windmere-Durable and
Mr. Newman have agreed that upon the consummation of the Offering, Windmere
will transfer 250,000 shares of Common Stock to Mr. Newman. The $3.0 million
Windmere Note has been repaid in full. The other Windmere Note has been pledged
to the lenders under the Company's credit facility. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources." Windmere has agreed with the
Company to use a portion of the net proceeds from its sale of Common Stock in
the Offering to repay the $2.0 million Windmere Note in full. See "Use of
Proceeds," "Capitalization" and "Principal and Selling Shareholders." Since
April 1996, Windmere has paid the Company approximately $685,000 in interest on
the Windmere Notes. Upon the consummation of the Offering, the Company will
have no loans outstanding to Windmere.

WINDMERE WORKING CAPITAL LOANS TO THE COMPANY. In June 1997, Windmere
loaned to the Company $2.0 million for working capital purposes, in return for
which the Company issued to Windmere a $2.0 million unsecured demand
subordinated promissory note bearing interest at the rate of 2.0% above the
prime rate of NationsBank, National Association (South). In August 1997,
Windmere opened four letters of credit on behalf of the Company, for working
capital purposes, in return for which the Company issued to Windmere in
September 1997 an unsecured demand subordinated revolving promissory note in
the principal amount of up to approximately $3.0 million bearing interest at
the rate of 2.0% above the prime rate of NationsBank, National Association
(South) (the "Revolving Note"). In addition, the Revolving Note provided that
Windmere may offset any amounts not paid by the Company thereunder by a
reduction in outstanding principal under the remaining Windmere Note. On June
8, 1998, the Company used a portion of the funds available under its credit
facility to repay in full the Revolving Note and the $2.0 million note, plus
accrued and unpaid interest thereon. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources." Since June 1997, the Company has paid Windmere approximately
$218,000 in interest on these notes. Upon the consummation of the Offering,
Windmere will have no loans outstanding to the Company. See "--Acquisition of
PRC Manufacturing Facility from Windmere".

WINDMERE GUARANTY UNDER FORMER CREDIT FACILITY. By an Amendment to
Guaranty Agreement dated as of September 15, 1997 between Windmere-Durable and
the Company's former lenders, Windmere-Durable increased the limit of its
guaranty of the Company's obligations to the lenders under its former credit
facility from $3.0 million to $9.0 million. In connection with this increase,
the Company, on September 18, 1997, entered into an Indemnification and
Security Agreement (the "Indemnification and Security Agreement") with
Windmere-Durable pursuant to which the Company granted to Windmere-Durable a
security interest in substantially all of the Company's assets, subordinate
only to the interest of such lenders. The security interest granted pursuant to
the Indemnification and Security Agreement also secured the Company's
obligations to Windmere under the Revolving Note.

The Company and Windmere-Durable agreed that the security interest in the
Company's assets granted by the Indemnification and Security Agreement would
terminate upon an increase by

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Mr. Newman of the limitation of his guaranty of the Company's obligations to
the Banks from $3.0 million to $6.0 million. See "--Joel Newman--Newman
Collateral and Guaranty under Credit Facility." Such increase in the guaranty
would not, however, terminate Windmere's right to offset any amounts due and
owing to it by the Company under the Revolving Note against Windmere's payment
obligations under the Windmere Notes.

The parties further agreed that upon any default by the Company under the
Revolving Note, the payment by Mr. Newman of one-half of the amount due would
also result in the termination of Windmere-Durable's security interest under
the Indemnification and Security Agreement, provided, that (i) Mr. Newman had
increased the amount of his guaranty as set forth above, (ii) the loan from the
Banks had been reduced to $3.0 million or (iii) the guarantees of
Windmere-Durable and Mr. Newman to the Banks had been terminated as a result of
the repayment and termination of the Company's current credit facility.

Both the guaranty provided by Windmere-Durable and the guaranty provided
by Joel Newman were terminated on June 8, 1998 upon the refinancing of the
Company's former credit facility with funds available under the credit facility
with The National Bank of Canada. The Company's current credit facility does
not include a guaranty by either Windmere-Durable or Mr. Newman.

ACQUISITION OF PRC MANUFACTURING FACILITY FROM WINDMERE. In the fall of
1997, the Company acquired DEI from DEM, a wholly-owned subsidiary of
Windmere-Durable. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview and Highlights--Certain
Relationships." DEI owns the Company's PRC manufacturing facility. The
acquisition was effected through the purchase by NEIL, of (i) certain
technology and know-how from DEI on October 1, 1997 for approximately $2.0
million and (ii) of all of the capital stock of DEI from DEM on November 1,
1997 for approximately $1,300 in cash. At the time of the acquisition, DEI was
indebted to DEM in the amount of approximately $6.2 million for loans to
finance the acquisition of certain fixed assets, capital expenditures and raw
materials.

In connection with the acquisition, (i) DEI granted to DEM a security
interest in its fixed assets and inventory to secure its obligation to repay
such indebtedness, (ii) DEI assigned NEIL's indebtedness for the $2.0 million
purchase price of the technology and know-how to DEM, (iii) DEM made available
to DEI a loan for equipment acquisitions and working capital in the amount of
up to $500,000 on a demand basis (and due no later than October 31, 2003),
which amount may be increased at DEM's discretion, (iv) DEM agreed not to
compete in the design, research, development or manufacture of music centers
and video compact disc players in the PRC prior to September 30, 2003, (v) DEM
agreed to make available to NEIL, without charge, its general manufacturing
software program until October 31, 2003, (vi) the Company agreed to guarantee
all of NEIL's and DEI's indebtedness to DEM, (vii) NEIL and DEI became obligors
under the Company's former credit facility, and (viii) all of the obligations
of the Company, NEIL and DEI to DEM were subordinated to their obligations to
the lenders under such facility. NEIL and DEI are also obligors under the
Company's credit facility with The National Bank of Canada. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

DEI's approximately $6.2 million indebtedness to DEM matures on October
31, 2003. NEIL's $2.0 million indebtedness to DEM is payable in 24 equal
quarterly installments from 1998 through 2003, and the outstanding principal
amount of such indebtedness is approximately $1.8 million. In addition, the
outstanding principal amount of the working capital loan described in clause
(iii) of the preceding paragraph has been increased to approximately $3.0
million. All the indebtedness of NEIL and DEI to DEM described in the foregoing
paragraph bears interest at a rate equal to 1.0% percent above the prime rate
of NationsBank, National Association (South), and the aggregate outstanding
principal amount of such indebtedness is approximately $11.0 million. Since the
date of the DEI acquisition, DEI and NEIL have paid DEM approximately $354,000
in principal and interest pursuant to such indebtedness. The Company will use a
portion of the proceeds from the sale of Common Stock in the Offering to repay
such indebtedness in full. See "Use of Proceeds."

Windmere-Durable provides the Company with certain administrative services
with respect to the PRC manufacturing facility for a monthly management fee of
approximately $11,800. For example,

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pursuant to this arrangement, Windmere-Durable or its affiliates purchase
certain raw materials and other goods and services and pay certain accounts
payable and collect certain accounts receivable on behalf of the Company and
its subsidiaries, including DEI. Amounts paid by Windmere-Durable or its
affiliates on behalf of the Company are reimbursed by the Company. Since the
date of the DEI acquisition, the Company has paid Windmere-Durable a total of
approximately $129,000 under this arrangement.

JOEL NEWMAN

NEWMAN WORKING CAPITAL LOAN TO THE COMPANY. In July 1997, Mr. Newman
loaned the Company $2.0 million for working capital purposes, in return for
which the Company issued to Mr. Newman a $2.0 million unsecured demand
promissory note. The note bore interest at the rate of 2.0% above the prime
rate of NationsBank, National Association (South). On June 8, 1998, the Company
used a portion of the funds available under its credit facility to repay the
note in full. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources." Since June 1997,
the Company has paid Mr. Newman approximately $106,000 in interest on the note.
Upon the consummation of the Offering, Mr. Newman will have no loans
outstanding to the Company.

NEWMAN COLLATERAL AND GUARANTY UNDER CREDIT FACILITY. In 1996 and 1997,
the Company paid Mr. Newman approximately $72,000 and $42,000, respectively, in
consideration for the pledge by Mr. Newman of certain securities as collateral
for the Company's obligations under its then existing credit facility. Such
pledge was terminated in July 1997 . In addition, the guaranty provided by Joel
Newman under the Company's former credit facility was terminated upon the
refinancing and termination of such facility with funds available under the
current credit facility with The National Bank of Canada. The current credit
facility does not include a guaranty by Mr. Newman.

COMPANY LOANS TO NEWMAN. During 1995, 1996 and 1997, the Company loaned
Mr. Newman an aggregate of approximately $224,000. This loan bears interest at
7.0% per annum, is unsecured and is payable on demand. Mr. Newman has agreed
with the Company to use a portion of the net proceeds from his sale of Common
Stock in the Offering to repay this loan in full. See "Use of Proceeds" and
"Principal and Selling Shareholders." Since 1995, Mr. Newman has paid the
Company approximately $52,000 in interest on this loan. Upon the consummation
of the Offering, the Company will have no loans outstanding to Mr. Newman.

AIRCRAFT LEASE. The Company leases a jet aircraft from F Fifty Holdings,
Inc., a company owned by Joel Newman ("F Fifty"). Mr. Newman owns 45.0% of the
Common Stock on the date of this Prospectus and is the Company's Chairman of
the Board, President and Chief Executive Officer. The Company pays an annual
fee of $150,000, and when the aircraft is being utilized, the Company pays an
additional hourly fee at the current market rate. The Company is not
responsible for insurance, fuel costs, crew costs, maintenance costs, landing
fees, parking fees, overflight charges or any other such expenses. The term of
the lease is from June 1, 1997 through June 30, 2007. Since June 1997, the
Company has paid F Fifty a total of approximately $369,000 for the lease of the
aircraft. In June 1997, the Company loaned F Fifty approximately $330,000 to
purchase the aircraft. This loan does not bear interest and is unsecured and
payable on demand. Mr. Newman has agreed with the Company to use a portion of
the net proceeds from his sale of Common Stock in the Offering to cause F Fifty
to repay this loan in full. See "Use of Proceeds." In 1997, Windmere used the
aircraft from time to time and paid the Company approximately $90,000 for such
use. Since January 1998, Windmere has leased the aircraft from F Fifty.
Windmere pays F Fifty an annual fee of $180,000 and pays no hourly fee,
provided it does not use the aircraft for more than 100 hours per year.

Upon the consummation of the Offering, the Company will have no loans
outstanding to or from Mr. Newman, Windmere or any other affililate. The
Company does not intend to lend to or borrow from Windmere or Mr. Newman in the
future. The Company intends to have its audit committee (composed of two
unaffiliated directors) evaluate all existing or proposed transactions with
related parties. See "Management--Committees of the Board of Directors."

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PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information concerning the beneficial
ownership of the Common Stock immediately prior to the Offering and as adjusted
to reflect the sale of the shares offered by this Prospectus by (i) each of the
Company's Named Executive Officers and directors, (ii) each person who is the
beneficial owner of 5% or more of the Common Stock and (iii) all executive
officers and directors as a group.

SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERING(2) SHARES TO BE AFTER THE OFFERING(2)
-------------------------- SOLD IN THE ------------------------
NAME AND ADDRESS(1) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
- -------------------------------------- ----------- ------------ ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Joel Newman(3)(4) .................... 4,500,000 45.0% %
Windmere(4) .......................... 5,000,000 50.0
Hatch Masuda(5) ...................... -- -- -- -- --
Ichiro Okamoto(6) .................... -- -- -- -- --
Stuart Slugh(7) ...................... -- -- -- -- --
Leonor Schuck(8) ..................... -- -- -- -- --
David Friedson(9) .................... 5,000,000 50.0
Arnold Thaler(10) .................... -- -- -- -- --
Cesar Alvarez(11) .................... 500,000 5.0 -- 500,000
All directors and Named Executive
Officers of the Company
as a group (7 persons)(12) ......... 9,500,000 95.0% %
</TABLE>

- ----------------
* Less than 1%
(1) Unless otherwise indicated, the address of each party is c/o the Company,
16550 N.W. 10th Avenue, Miami, Florida 33169.
(2) Based on 10,000,000 shares outstanding at April 15, 1998 and as
adjusted after the Offering. Pursuant to the rules of the Commission,
certain shares which a person has the right to acquire within 60 days of
the date hereof pursuant to the exercise of stock options and warrants are
deemed to be outstanding for the purpose of computing the percentage
ownership of such person but are not deemed outstanding for the purpose of
computing the percentage ownership of any other person.
(3) Includes 4,500,000 shares directly owned. Excludes 175,000 shares subject
to unexercisable stock options.
(4) Does not reflect the possible sales of shares upon exercise of the
Underwriters' over-allotment option. Joel Newman and Windmere have granted
an option to the Underwriters, exercisable for 30 days after the date of
this Prospectus, to purchase up to an aggregate of additional shares
of Common Stock at the initial public offering price set forth on the
cover page of this Prospectus, less the underwriting discounts and
commissions. If the Underwriters exercise the option in full, Mr. Newman
and Windmere will sell and shares, respectively, resulting
in Mr. Newman and Windmere owning shares ( %) and
shares ( %), respectively, after the closing of the Offering. See
"Underwriting." Windmere-Durable and Mr. Newman have agreed that upon the
consummation of the Offering, Windmere will transfer 250,000 shares of
Common Stock to Mr. Newman. Mr. Friedson is a control person of Windmere.
See footnote (9).The address of Windmere is c/o Windmere-Durable Holdings,
Inc., 5980 Miami Lakes Drive, Miami Lakes, Florida 33014-9897.
(5) Excludes 125,000 shares subject to unexercisable stock options.
(6) Excludes 60,000 shares subject to unexercisable stock options.
(7) Excludes 45,000 shares subject to unexercisable stock options.
(8) Excludes 60,000 shares subject to unexercisable stock options.
(9) Includes 5,000,000 shares (50.0%) held of record by Windmere prior to the
Offering. Windmere is a wholly-owned subsidiary of Windmere-Durable. Mr.
Friedson is the Chairman of the Board of Directors, Chief Executive
Officer, President and a shareholder of Windmere-Durable. Mr. Friedson
may, by virtue of his relationship with Windmere-Durable, be deemed to
beneficially own the shares of Common Stock held of record by Windmere.
Mr. Friedson disclaims beneficial ownership of the shares, except to the
extent of his respective investment interests in Windmere and
Windmere-Durable. The address of Mr. Friedson is c/o Windmere-Durable
Holdings, Inc., 5980 Miami Lakes Drive, Miami Lakes, Florida 33014-9897.
(10) The address of Mr. Thaler is c/o Windmere-Durable Holdings, Inc. 5980
Miami Lakes Drive, Miami Lakes, Florida 33014-9897.
(11) The address of Mr. Alvarez is c/o Greenberg Traurig Hoffman Lipoff Rosen &
Quentel, P.A., 1221 Brickell Avenue, 22nd Floor, Miami, Florida 33131.
(12) Includes 4,500,000 shares directly owned by Mr. Newman and 5,000,000
shares directly owned by Windmere. Excludes an aggregate of 465,000 shares
subject to unexercisable stock options held by Messrs. Newman, Masuda,
Okamoto and Slugh and by Ms. Schuck.

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DESCRIPTION OF CAPITAL STOCK

AUTHORIZED AND OUTSTANDING CAPITAL STOCK

The authorized capital stock of the Company consists of (i) 50,000,000
shares of Common Stock, par value $0.01 per share, of which will be
outstanding upon the consummation of the Offering, and (ii) 1,000,000 shares of
preferred stock, par value $0.01 per share (the "Preferred Stock"), none of
which will be outstanding. The following description of the Company's capital
stock does not purport to be complete and is qualified in its entirety by
reference to the Florida Business Corporation Act (the "FBCA"), as amended from
time to time, and the Articles and Bylaws, which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. See "Additional
Information."

COMMON STOCK

The holders of the Common Stock are entitled to one vote per share of
record on all matters to be voted upon by shareholders and to vote together as
a single class for the election of directors and in respect of other corporate
matters. At a meeting of shareholders at which a quorum is present, for all
matters other than the election of directors, a majority of the votes cast
decides all questions, unless the matter is one upon which a different vote is
required by express provision of law or the Articles or Bylaws. Directors will
be elected by a plurality of the votes of the shares present at a meeting.
There is no cumulative voting with respect to the election of directors (or any
other matter).

The holders of Common Stock have no preemptive rights and have no rights
to convert their Common Stock into any other securities. Subject to the rights
of holders of Preferred Stock, if any, in the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to participate equally and ratably in all assets remaining after payment of
liabilities and distribution of any preferential amount.

The holders of Common Stock are entitled to receive ratably such dividends
as the Board of Directors may declare out of funds legally available therefor,
when and if so declared, subject to any preference in favor of outstanding
shares of Preferred Stock, if any. The payment by the Company of dividends, if
any, rests within the discretion of its Board of Directors and will depend upon
the Company's results of operations, financial condition and capital
expenditure plans, as well as other factors considered relevant by the Board of
Directors.

PREFERRED STOCK

Upon completion of the Offering, no shares of Preferred Stock will be
outstanding, and the Company has no present intention to issue any shares of
Preferred Stock. The Board of Directors of the Company, without further action
by the shareholders, will be authorized to issue from time to time up to
1,000,000 shares of Preferred Stock in one or more series and to fix and
determine as to any series all the relative rights and preferences of shares in
such series, including, without limitation, relative voting, dividend,
redemption, liquidation, conversion and other powers, preferences, rights,
qualifications and limitations. The issuance of shares of Preferred Stock, or
the issuance of rights to purchase such shares, could be used to discourage an
unsolicited acquisition proposal that some, or a majority, of the shareholders
might believe to be in the best interests of the Company or in which
shareholders might receive a premium for their stock over the then market price
of such stock. In addition, under certain circumstances, the issuance of
Preferred Stock could adversely affect the voting power of the holders of the
Common Stock.

OPTIONS TO PURCHASE COMMON STOCK

Options to purchase 618,700 shares of Common Stock at an exercise price of
$2.00 per share were granted to 21 employees on February 28, 1997 and remain
outstanding on the date hereof. Options to

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<PAGE>

purchase 29,900 shares of Common Stock at an exercise price of $4.00 per share
were granted to 12 employees on October 27, 1997, and options to purchase 400
shares of Common Stock at an exercise price of $4.00 per share were granted to
two employees on November 30, 1997 and remain outstanding on the date hereof.
One fifth of the options held by each employee vest on each anniversary of the
grant thereof. The option agreements executed by the employees in connection
therewith prohibit the exercise of any of the options or the sale or other
disposition of any shares of Common Stock acquired pursuant to the exercise of
such options for a period of 180 days after the date of this Prospectus without
the prior written consent of the Underwriters. See "Management--Stock Option
Plan."

LIMITED LIABILITY AND INDEMNIFICATION

Under the FBCA, a director is not personally liable for monetary damages
to the corporation or any other person for any statement, vote, decision, or
failure to act unless (i) the director breached or failed to perform his duties
as a director and (ii) a director's breach of, or failure to perform, those
duties constitutes (1) a violation of the criminal law, unless the director had
reasonable cause to believe his conduct was lawful or had no reasonable cause
to believe his conduct was unlawful, (2) a transaction from which the director
derived an improper personal benefit, either directly or indirectly, (3) a
circumstance under which an unlawful distribution is made, (4) in a proceeding
by or in the right of the corporation to procure a judgment in its favor or by
or in the right of a shareholder, conscious disregard for the best interest of
the corporation or willful misconduct, or (5) in a proceeding by or in the
right of someone other than the corporation or a shareholder, recklessness or
an act or omission which was committed in bad faith or with malicious purpose
or in a manner exhibiting wanton and willful disregard of human rights, safety,
or property. A corporation may purchase and maintain insurance on behalf of any
director or officer against any liability asserted against him and incurred by
him in his capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the FBCA.

The Articles and Bylaws provide that the Company shall, to the fullest
extent permitted by applicable law, as amended from time to time, indemnify and
may advance expenses to all directors of the Company, as well as any officers
or employees of the Company to whom the Company has agreed to grant
indemnification.

PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECT

Certain provisions of the FBCA and of the Articles and the Bylaws,
summarized in the following paragraphs, may be considered to have an
anti-takeover effect and may delay, deter or prevent a tender offer, proxy
contest or other takeover attempt that a shareholder might consider to be in
such shareholder's best interest, including such an attempt as might result in
payment of a premium over the market price for shares held by shareholders.
These provisions may also have the effect of rendering changes in the Board of
Directors and management of the Company more difficult. Any discouraging effect
upon takeover attempts could potentially depress the market price of the Common
Stock or inhibit temporary fluctuations in the market price of the Common Stock
that otherwise could result from actual or rumored takeover attempts.

ANTI-TAKEOVER PROVISIONS OF FLORIDA LAW. Florida has enacted legislation
that may deter or frustrate takeovers of Florida corporations. The "Control
Share Acquisitions" section of the FBCA generally provides that shares acquired
in excess of certain specified thresholds, beginning at 20% of a corporation's
outstanding voting shares, will not possess any voting rights unless such
voting rights are approved by a majority vote of a corporation's disinterested
shareholders. The "Affiliated Transactions" section of the FBCA generally
requires majority approval by disinterested directors or supermajority approval
of disinterested shareholders of certain specified transactions (such as a
merger, consolidation, sale of assets, issuance or transfer of shares or
reclassifications of securities) between a corporation and a holder of more
than 10% of the outstanding shares of the corporation, or any affiliate of such
shareholder.

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<PAGE>

The directors of the Company are subject to the "general standards for
directors" provisions set forth in the FBCA. These provisions provide that in
discharging his or her duties and determining what is in the best interests of
the Company, a director may consider such factors as the director deems
relevant, including the long-term prospects and interests of the Company and
its shareholders and the social, economic, legal or other effects of any
proposed action on the employees, suppliers or customers of the Company, the
community in which the Company operates and the economy in general.
Consequently, in connection with any proposed action, the Board of Directors is
empowered to consider interests of other constituencies in addition to the
Company's shareholders, and directors who take into account these other factors
may make decisions which are less beneficial to some, or a majority, of the
shareholders than if the law did not permit consideration of such other
factors.

AUTHORIZED BUT UNISSUED SHARES. Subject to the applicable requirements of
the Nasdaq National Market, the authorized but unissued shares of Common Stock
and Preferred Stock are available for future issuance without shareholder
approval. These additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved Common Stock and Preferred Stock may enable the
Board of Directors to issue shares to persons friendly to current management
which would render more difficult or discourage an attempt to obtain control of
the Company by means of a proxy contest, tender offer, merger or otherwise, and
thereby protect the continuity of the Company's management.

SPECIAL MEETING OF SHAREHOLDERS. The Articles provide that special
meetings of shareholders of the Company may be called only by the Board of
Directors, the Company's Chief Executive Officer or the holders of not less
than 50% of all votes entitled to be cast on any issue proposed to be
considered at such special meeting. This provision will make it more difficult
for shareholders to take actions opposed by the Board of Directors.

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. The Articles provide that shareholders seeking to bring business
before an annual meeting of shareholders, or to nominate candidates for
election as directors at an annual or special meeting of shareholders, must
provide timely notice thereof in writing. To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company not less than 120 days nor more than 180 days prior to the first
anniversary of the date of the Company's notice of annual meeting provided with
respect to the previous year's annual meeting; provided, however, that in the
event of a special meeting or if no annual meeting was held in the previous
year or the date of the annual meeting has been changed by more than 30
calendar days from the date contemplated by the previous year's notice of
annual meeting, such notice by the shareholder to be timely must be delivered
to or mailed and received at the principal executive offices of the Company not
later than the close of business on the seventh day following the date on which
notice of the date of the meeting is mailed to shareholders or made public,
whichever occurs first. The Articles also specify certain requirements for a
shareholder's notice to be in proper written form. These provisions may
preclude some shareholders from bringing matters before the shareholders at an
annual or special meeting or from making nominations for directors at an annual
or special meeting.

VACANCIES. The Articles provide that a vacancy on the Board of Directors
occurring from an increase in the number of directors or otherwise may be
filled by the vote of a majority of directors then in office, though less than
a quorum, or by a sole remaining director.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, New York, New York.

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon the completion of the Offering, the Company will have shares of
Common Stock outstanding, assuming no outstanding stock options are exercised.
Of these shares, the shares of Common Stock sold in the Offering (
shares if the Underwriters' over-allotment option is exercised in full) will be
freely tradeable by persons other than affiliates of the Company, without
restriction under the Securities Act. The remaining shares of Common
Stock will be "restricted securities" within the meaning of Rule 144 under the
Securities Act, and may not be sold in the absence of registration under the
Securities Act unless an exemption from registration is available, including
the exemptions contained in Rule 144 and Rule 701. Commencing 90 days after the
date hereof, of these shares of Common Stock will become eligible for
sale in the open market, subject to volume and other limitations imposed by
Rule 144. In addition, the Company has granted certain registration rights with
respect to holders of shares of Common Stock ( shares if the
Underwriters' over-allotment option is exercised in full), as well as options
to acquire 175,000 shares. Sales of all or a portion of such shares could have
a material adverse effect upon the price of the Common Stock. However, the
directors, executive officers and Selling Shareholders of the Company have
agreed not to sell, contract to sell or otherwise dispose of any of these
shares of Common Stock for a period of 180 days after the date of this
Prospectus without the prior written consent of Warburg Dillon Read LLC, as
discussed below.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including an affiliate of the Company, who has
beneficially owned his or her shares for at least one year (including the prior
holding period of any prior owner other than an affiliate) is entitled to sell
within any three-month period that number of shares which does not exceed the
greater of 1% of the outstanding shares of the Common Stock, or the average
weekly trading volume during the four calendar weeks preceding each such sale.
Sales under Rule 144 also are subject to certain manner of sale provisions,
notice requirements, and the availability of current public information about
the Company. A person (or persons whose shares are aggregated) who is not or
has not been deemed an "affiliate" of the Company for at least three months,
and who has beneficially owned shares for at least two years (including the
holding period of any prior owner other than an affiliate) would be entitled to
sell such shares under Rule 144 without regard to the limitations discussed
above.

In general, under Rule 701, beginning 90 days after the closing of the
Offering, certain shares issued upon the exercise of options granted by the
Company prior to the date of this Prospectus will also be available for sale in
the public market. Any employee, officer or director of or consultant to the
Company who purchased his or her shares pursuant to a written compensatory plan
or contract may be entitled to rely on the resale provisions of Rule 701. Rule
701 permits affiliates and non-affiliates to sell their Rule 701 shares under
Rule 144 without complying with the one-year holding period requirements of
Rule 144. Rule 701 further provides that non-affiliates may sell such shares in
the public market in reliance on Rule 144 without having to comply with the
public information, volume limitation or notice provisions of Rule 144. In both
cases, a holder of Rule 701 shares is required to wait until 90 days after the
date of this Prospectus before selling such shares in the public market.

An aggregate of 1,000,000 shares of Common Stock are reserved for issuance
to employees and directors of the Company pursuant to the Plan. Currently,
649,000 shares of Common Stock are issuable under outstanding options granted
to employees pursuant to the Plan. With respect to 618,700 such options, which
were granted on February 28, 1997, (i) as of the date of this Prospectus,
123,740 will be vested and (ii) 123,740 will vest on each February 28,
commencing February 28, 1999. With respect to 29,900 such options, 5,980 will
vest on each anniversary of October 27, 1997, the date they were granted. With
respect to 400 such options, 80 will vest on each anniversary of November 30,
1997, the date they were granted. Once vested, the shares issuable upon the
exercise of all of the foregoing options would be eligible subject to
compliance with Rule 701, the stock option agreements and the Lock-up
Agreements with Warburg Dillon Read LLC described below. Under the stock option
agreements pursuant to which the options were granted, one fifth of the options
granted to each employee vest on each anniversary of the date of grant;
provided, however, that the exercise of any of the options or the

57
<PAGE>

sale or other disposition of any shares of Common Stock acquired pursuant to
the exercise of such options for a period of 180 days after the date of this
Prospectus without the prior written consent of the Underwriters is prohibited.

After consummation of the Offering, the Company intends to file one or
more registration statements on Form S-8 with respect to shares of Common Stock
issuable under the Plan. See "Management--Stock Option Plan." Shares covered by
any such registration statement will be eligible for sale in the public market
upon the effectiveness of such registration statement (which occurs immediately
upon filing), subject to the limitations of Rule 144 that are applicable to
affiliates the Lock-up Agreements described below and the stock option
agreements.

The Company and its executive officers, directors, and Selling
Shareholders have agreed with Warburg Dillon Read LLC pursuant to the Lock-up
Agreements that they will not sell, contract to sell, pledge, grant any option
to purchase, transfer or otherwise dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into, or exchangeable for,
Common Stock or warrants or other rights to purchase or acquire shares of
Common Stock or permit the registration of shares of Common Stock, for a period
of 180 days after the date of this Prospectus, without the prior written
consent of Warburg Dillon Read LLC, except, without such consent, the Company
may issue and register, and the Company and the Selling Shareholders may sell,
the shares of Common Stock offered in the Offering (including the
over-allotment). Warburg Dillon Read LLC, in its sole discretion, without
notice, may release some or all of the shares subject to Lock-up Agreements
from time to time.

Prior to this Offering there will be no market for the Common Stock, and
no accurate prediction can be made of the effect, if any, that market sales of
restricted securities or of shares subject to stock options or the availability
of these shares for sale will have on the market price of the Common Stock
prevailing from time to time. Sales of substantial amounts of any of these
shares in the public market could adversely affect prevailing market prices for
the Common Stock. See "Risk Factors--Shares Eligible for Future Sale."

REGISTRATION RIGHTS

Upon the expiration of 180 days after the date of this Prospectus, each of
Joel Newman and Windmere has the right to (i) request that the Company
register, as expeditiously as possible, any or all of the Common Stock then
owned by such shareholder, including all shares of Common Stock issuable
pursuant to any derivative securities of the Company then held by such
shareholder and (ii) include such shares of Common Stock in registrations
proposed to be effected by the Company. In addition, upon receipt of any such
request from Mr. Newman or Windmere, the Company must notify the other of such
request and offer to include the shares held by such non-requesting shareholder
in the registration statement to be filed pursuant to the request. The Company
has agreed to indemnify such shareholders against liabilities under the
Securities Act in certain circumstances in connection with any such
registration statement.

58
<PAGE>

CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the acquisition, ownership and disposition of Common
Stock by a "Non-U.S. Holder." For this purpose, a "Non-U.S. Holder" is any
person who is, for U.S. federal income tax purposes, a non-resident alien
individual, a foreign corporation, a foreign partnership or a foreign estate or
trust, as those terms are defined in section 7701(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). The rules classifying trusts as foreign
for U.S. federal income tax purposes have changed recently, and a prospective
purchaser of Common Stock that is a trust is urged to consult its tax adviser
regarding its classification. This discussion does not address tax consequences
to U.S. citizens or residents or domestic corporations, partnerships, estates
or trusts. This discussion does not address all aspects of U.S. federal income
and estate taxation and does not deal with state, local or foreign tax
consequences that may be relevant to a Non-U.S. Holder in light of his
particular circumstances. This discussion is based on provisions of the Code,
existing and proposed regulations promulgated thereunder and administrative and
judicial interpretations thereof as of the date hereof, all of which are
subject to change, possibly retroactively. Each prospective purchaser of Common
Stock is advised to consult his tax adviser with respect to current and
possible future U.S. federal income and estate tax consequences of acquiring,
owning and disposing of Common Stock as well as any tax consequences that may
arise under the laws of any state, local, foreign or other taxing jurisdiction.

DIVIDENDS

A dividend paid to a Non-U.S. Holder of Common Stock generally will be
subject to withholding of U.S. federal income tax at a 30 percent rate or at a
lower rate that any be specified by an applicable income tax treaty. However, a
dividend that is effectively connected with the conduct of a trade or business
by the Non-U.S. Holder within the United States (or, if a tax treaty applies,
is attributable to a U.S. permanent establishment of the Non-U.S. Holder) is
not subject to U.S. withholding tax (provided certain certification and
disclosure requirements are satisfied) but instead is subject to U.S. federal
income tax on a net income basis at regular graduated U.S. federal income tax
rates. Any effectively connected dividend realized by a foreign corporation
will be subject, under certain circumstances, to an additional "branch profits
tax" at a 30 percent rate or at a lower rate that may be specified by an
applicable income tax treaty. A Non-U.S. Holder of Common Stock who is eligible
for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may
obtain a refund of any excess tax withheld by filing an appropriate claim for
refund with the U.S. Internal Revenue Service ("IRS").

Under U.S. Treasury regulations in effect for payments made before January
1, 2000, dividends paid to an address outside the United States are presumed to
be paid to a resident of that country (unless the payer has knowledge to the
contrary) for purposes of the withholding tax discussed above and, under the
current interpretation of U.S. Treasury regulations, for purposes of
determining the applicability of a tax treaty rate. Under U.S. Treasury
regulations that apply to payments made after December 31, 1999, a Non-U.S.
Holder of Common Stock who wishes to claim the benefit of an applicable treaty
rate (and avoid backup withholding of tax, as discussed below) would be
required to satisfy certain certification and other requirements.

GAIN ON DISPOSITION OF COMMON STOCK

A Non-U.S. Holder generally will not be subject to U.S. federal income tax
with respect to gain recognized on a sale or other disposition of Common Stock
unless (i) the gain is effectively connected with a trade or business of the
Non-U.S. Holder in the United States, (ii) in the case of a Non-U.S. Holder who
is an individual and holds the Common Stock as a capital asset, the holder is
present in the United States for 183 or more days in the taxable year of the
sale or other disposition and certain other conditions are met, (iii) the
Non-U.S. Holder is subject to U.S. federal income tax pursuant to rules
applicable to certain U.S. expatriates and prior lawful permanent residents of
the United States or (iv) the Company is or, in certain circumstances, has been
a "United States real property holding

59
<PAGE>

corporation" for U.S. federal income tax purposes. The Company is not currently
and does not anticipate becoming a "United States real property holding
corporation" for U.S. federal income tax purposes.

An individual Non-U.S. Holder described in clause (i) above generally will
be subject to tax on its net effectively connected gains at regular graduated
U.S. federal income tax rates. Gain recognized by a Non-U.S. Holder described
in clause (i) above that is a foreign corporation will be subject to tax at
regular graduated U.S. federal income tax rates and, in addition, under certain
circumstances, will be subject to an additional "branch profits tax" at a 30
percent rate or at a lower rate that may be specified by an applicable income
tax treaty. Gain recognized by an individual Non-U.S. Holder described in
clause (ii) above, which may be offset by U.S. source capital losses (even
though the individual is not considered a resident of the United States), will
be subject to a 30 percent tax.

FEDERAL ESTATE TAX

Common Stock owned or treated as owned by an individual Non-U.S. Holder at
the time of death will be included in the Non-U.S. Holder's gross estate for
U.S. federal estate tax purposes unless an applicable estate tax treaty
provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

The company must report annually to the IRS and to each Non-U.S. Holder
the amount of dividends paid to that Non-U.S. Holder and the tax withheld with
respect to those dividends, regardless of whether withholding was required.
Copies of the information returns reporting the dividends and the tax withheld
also may be made available to the tax authorities in the country in which the
Non-U.S. Holder resides under the provisions of an applicable income tax treaty
or other agreement.

Under U.S. Treasury regulations in effect for payments made before January
1, 2000, backup withholding of tax generally will not apply to dividends paid
to a Non-U.S. Holder at an address outside the United States (unless the payer
has knowledge that the payee is a United States person). Under Treasury
regulations that apply to payments made after December 31, 1999, however, a
Non-U.S. Holder will be subject to backup withholding of tax, at the rate of 31
percent, unless applicable certification and other requirements are met.

Payment of the proceeds of a sale of Common Stock by or through a U.S.
office of a broker is subject to both backup withholding and information
reporting unless the beneficial owner certifies under penalties of perjury that
it is a Non-U.S. Holder or otherwise establishes an exemption. In general,
backup withholding and information reporting will not apply to a payment made
outside the United States of the proceeds of a sale of Common Stock by or
through a foreign office of a broker. However, U.S. information reporting
requirements (but not backup withholding) will apply to a payment of
disposition proceeds outside the United States if: (i) the payment is made
through an office outside the United States of a broker that, for U.S. federal
income tax purposes, is a United States person, a controlled foreign
corporation, or a foreign person that derives 50 percent or more of its gross
income for a specified period from the conduct of a trade or business in the
United States, and (ii) the broker fails to maintain documentary evidence in
its records that (a) the beneficial owner is a Non-U.S. Holder and certain
other conditions are met or (b) the beneficial owner otherwise is entitled to
an exemption.

Any amounts withheld under the backup withholding rules may be allowed as
a refund or as a credit against the holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.

60
<PAGE>

UNDERWRITING

The names of the Underwriters of the shares of Common Stock offered hereby
and the aggregate number of shares of Common Stock which each has severally
agreed to purchase from the Company, subject to the terms and conditions
specified in the Underwriting Agreement, are as follows:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ----------------------------------- -----------
<S> <C>
Warburg Dillon Read LLC ...........
Jefferies & Company, Inc. .........

---------
Total .............................
=========
</TABLE>

The Managing Underwriters are Warburg Dillon Read LLC and Jefferies &
Company, Inc.

If any shares of Common Stock offered hereby are purchased by the
Underwriters, all such shares will be so purchased. The Underwriting Agreement
contains certain provisions whereby if any Underwriter defaults in its
obligation to purchase such shares and if the aggregate obligations of the
Underwriters so defaulting do not exceed ten percent of the shares offered
hereby, the remaining Underwriters, or some of them, must assume such
obligations.

The Underwriters propose to offer the shares of Common Stock to the public
initially at the offering price set forth on the cover page of this Prospectus,
and to certain dealers at such price less a concession not to exceed $
per share. The Underwriters may allow, and such dealers may re-allow, a
concession not to exceed $ per share on sales to certain other dealers.
The offering of the shares of Common Stock is made for delivery when, as and if
accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares. After the
shares are released for sale to the public, the public offering price, the
concession and the reallowance may be changed by the Managing Underwriters.

The Selling Shareholders have granted to the Underwriters an option for 30
days from the date of the Underwriting Agreement to purchase up to an
additional shares of Common Stock from them at the offering price less the
underwriting discount set forth on the cover page of this Prospectus. The
Underwriters may exercise such option only to cover over-allotments made of the
shares in connection with this Offering. To the extent the Underwriters
exercise this option, each of the Underwriters will be obligated, subject to
certain conditions, to purchase the number of additional shares proportionate
to such Underwriter's initial commitment.

The Company, each of its directors and executive officers and the Selling
Shareholders have agreed that they will not sell, contract to sell, pledge,
grant any option to purchase, transfer or otherwise dispose of, directly or
indirectly, any shares of the Common Stock or any securities convertible into
or exchangeable for Common Stock or warrants or other rights to purchase or
acquire shares of Common Stock or permit the registration of shares of Common
Stock for a period of 180 days after the date of this Prospectus, without the
prior written consent of Warburg Dillon Read LLC, except, without such consent,
the Company may issue and register, and the Company and the Selling
Shareholders may sell, the shares of Common Stock offered in the Offering
(including the Underwriters' over-allotment option).

The Managing Underwriters, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate cover transactions and
penalty bids in accordance with Regulation M

61
<PAGE>

under the Exchange Act. Over-allotment involves syndicate sales in excess of
the Offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Common Stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Managing Underwriters to reclaim a selling concession
from a syndicate member when the Common Stock originally sold by such syndicate
member is purchased in a syndicate covering transaction to cover syndicate
short positions. Such stabilizing transactions, syndicate covering transactions
and penalty bids may cause the price of the Common Stock to be higher than it
would otherwise be in the absence of such transactions. These transactions may
be effected on the Nasdaq National Market or otherwise and, if commenced, may
be discontinued at any time.

Prior to the Offering, there will be no public market for the Common
Stock. Consequently, the initial public offering price for the shares of Common
Stock included in the Offering will be determined by negotiation among the
Company, the Selling Shareholders and the Managing Underwriters. Among the
principal factors to be considered in determining such price are prevailing
market and general economic conditions, the revenues and earnings of the
Company in recent periods, the current financial position of the Company,
estimates of the business potential of the Company and its industry, the
present state of the Company's development, an assessment of the Company's
management, market valuations of securities of companies engaged in activities
deemed by the Managing Underwriters to be similar to those of the Company, and
other factors deemed relevant. Consideration will also be given to the general
state of the securities market, the market conditions for new issues of
securities and the demand for similar securities of comparable companies. The
Company has applied for listing of the Common Stock on the Nasdaq National
Market under the symbol "NTCH."

The Company and the Selling Shareholders have agreed in the Underwriting
Agreement to indemnify the Underwriters against certain liabilities, including
any liabilities under the Securities Act, or to contribute to payments, the
Underwriters may be required to make in respect thereof.

The Underwriters do not intend to confirm sales to accounts over which
they exercise discretionary authority.

LEGAL MATTERS

Certain legal matters with respect to the Common Stock offered hereby will
be passed upon for the Company and for the Selling Shareholders by Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A., Miami, Florida, and for the
Underwriters by Cahill Gordon & Reindel, a partnership including a professional
corporation, New York, New York. Cesar L. Alvarez, a shareholder of Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A., owns 500,000 shares of the
Company's Common Stock. As to certain matters of Florida Law, Cahill Gordon &
Reindel will rely on the opinion of Greenberg Traurig Hoffman Lipoff Rosen &
Quentel, P.A.

EXPERTS

The Consolidated Financial Statements of the Company at December 31, 1996
and 1997 and for each of the three years in the period ended December 31, 1997,
appearing in this Prospectus and Registration Statement, have been audited by
Ernst & Young LLP, independent certified public accountants, as set forth in
their reports thereon appearing elsewhere herein, which, as to the year 1997,
is based in part on the report of Grant Thornton, independent auditors. The
financial statements referred to above are included in reliance upon reports
given upon the authority of such firms as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement on Form S-1 (the
"Registration Statement") with the Commission under the Securities Act in
respect of the Common Stock offered hereby. For purposes

62
<PAGE>

of this Prospectus, the term "Registration Statement" means the initial
Registration Statement and any and all amendments thereto. This Prospectus
omits certain information contained in the Registration Statement as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made
to the Registration Statement, including the exhibits thereto. Statements
herein concerning the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to such contract
or other document filed with the Commission as an exhibit to the Registration
Statement, or otherwise, each such statement, being qualified by and subject to
such reference in all respects.

As a result of the Offering, the Company will become subject to the
informational requirements of the Exchange Act, and in accordance therewith
will file reports, proxy and information statements, and other information with
the Commission. Reports, registration statements, proxy and information
statements, and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at its regional offices located at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300,
New York, New York 10048. Copies of these material may be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The Commission maintains
a site on the World Wide Web (http://www.sec.gov) that contains reports,
registration statements, proxy and information statements, and other
information filed electronically with the Commission. Information concerning
the Company will also be available for inspection at the offices of the Nasdaq
National Market, Reports Section, 1735 K Street, N.W., Washington, D.C. 2006.

The Company intends to furnish its shareholders with annual reports
containing audited financial statements which have been certified by its
independent auditors, and quarterly reports containing unaudited summary
financial information for each of the first three quarters of each fiscal year.

63
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Certified Public Accountants .......... F-2
Report of Independent Certified Public Accountants .......... F-3
Audited Consolidated Financial Statements
Consolidated Balance Sheets ................................. F-4
Consolidated Statements of Operations ....................... F-5
Consolidated Statements of Shareholders' Equity ............. F-6
Consolidated Statements of Cash Flows ....................... F-7
Notes to Consolidated Financial Statements .................. F-9
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
Newtech Electronics Industries, Inc.

We have audited the accompanying consolidated balance sheets of Newtech
Electronics Industries, Inc. (formerly New M-Tech Corporation) and subsidiaries
as of December 31, 1996 and 1997, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of Durable Electronics Industries Limited, a wholly-owned
subsidiary acquired in 1997, which statement reflects total assets of
$6,799,000 at December 31, 1997. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to data included for Durable Electronics Industries Limited, is based
solely on the report of the other auditors.

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

In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Newtech Electronics
Industries, Inc. and subsidiaries at December 31, 1996 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.

/s/ ERNST & YOUNG LLP

Miami, Florida

April 3, 1998, except for
the last paragraph of Note 1,
as to which the date is April 10, 1998

F-2
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
Durable Electronics Industries Limited
(Formerly known as Durable Electronics Factory Limited)

We have audited the balance sheet of Durable Electronics Industries
Limited (incorporated in Hong Kong with limited liability) as of December 31,
1997, and the related statements of operations and retained earnings and cash
flows for the period from November 1, 1997 to December 31, 1997 (not presented
separately herein). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Durable Electronics
Industries Limited as of December 31, 1997, and the results of its operations
and retained earnings and its cash flows for the period from November 1, 1997
to December 31, 1997, in conformity with generally accepted accounting
principles in the United States of America.

/s/ GRANT THORNTON

Hong Kong
April 2, 1998

F-3
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------- MARCH 31,
1996 1997 1998
-------------- --------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................. $ 2,671,973 $ 2,030,726 $ 2,209,845
Short-term investments .................................... 1,297,480 1,400,082 1,402,164
Accounts receivable, net of allowance for doubtful
accounts of $73,000 in 1996, $150,000 in 1997,
and $185,718 at March 31, 1998 .......................... 1,590,019 30,686,010 20,782,058
Due from affiliates ....................................... 100,822 1,349,732 684,728
Account receivable from officer ........................... 229,551 270,980 224,217
Inventory ................................................. 3,445,807 25,187,800 27,616,486
Prepaid expenses and other current assets ................. 332,859 1,261,348 1,768,260
Deferred tax asset ........................................ 135,474 486,236 780,606
------------ ------------ ------------
Total current assets ....................................... 9,803,985 62,672,914 55,468,364
Property and equipment, net ................................ 379,940 2,177,754 2,589,332
Other assets, net .......................................... 141,775 71,787 469,363
Intangible assets, net ..................................... 46,600 3,670,965 3,529,221
------------ ------------ ------------
Total assets ............................................... $ 10,372,300 $ 68,593,420 $ 62,056,280
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit ............................................ $ 27,701 $ 21,796,446 $ 18,575,943
Accounts payable and bank overdraft ....................... 3,802,564 16,395,436 14,084,429
Due to affiliates ......................................... -- -- 309,275
Notes payable to affiliate, current portion ............... -- 412,005 329,604
Notes payable to shareholders ............................. -- 7,173,564 7,135,390
Accrued expenses .......................................... 279,234 2,745,649 2,045,003
------------ ------------ ------------
Total current liabilities .................................. 4,109,499 48,523,100 42,479,644
Notes payable to affiliate, long-term portion .............. -- 7,785,120 7,785,120
Shareholders' equity:
Preferred stock, $.01 per value; 1,000,000 shares
authorized, none issued .................................
Common stock, $.01 par value; 50,000,000 shares
authorized, 10,000,000 shares issued .................... 100,000 100,000 100,000
Additional paid-in capital ................................ 9,900,152 9,900,152 9,900,152
Promissory notes due for purchase of common stock ......... (5,000,000) (5,000,000) (5,000,000)
Retained earnings ......................................... 1,262,649 7,285,048 6,791,364
------------ ------------ ------------
Total shareholders' equity ................................. 6,262,801 12,285,200 11,791,516
------------ ------------ ------------
Total liabilities and shareholders' equity ................. $ 10,372,300 $ 68,593,420 $ 62,056,280
============ ============ ============
</TABLE>

See accompanying notes.

F-4
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------- ----------------------------
1995 1996 1997 1997 1998
-------------- -------------- --------------- ------------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales .............................. $13,353,011 $39,060,136 $208,416,612 $ 8,419,941 $38,900,182
Cost of products sold .................. 11,993,097 35,171,566 186,433,089 7,209,874 35,357,690
----------- ----------- ------------ ----------- -----------
Gross profit ........................... 1,359,914 3,888,570 21,983,523 1,210,067 3,542,492
Selling expenses ....................... 845,541 1,284,872 10,532,664 542,778 1,728,160
General and administrative
expenses .............................. 1,154,941 1,842,490 4,597,839 867,704 1,986,652
Write-off of advances to affiliate ..... -- 980,018 -- -- --
----------- ----------- ------------ ----------- -----------
Total expenses ......................... 2,000,482 4,107,380 15,130,503 1,410,482 3,714,812
----------- ----------- ------------ ----------- -----------
Income (loss) from operations .......... (640,568) (218,810) 6,853,020 (200,415) (172,320)
Other (income) expense:
Interest expense ...................... 116,788 109,249 1,224,023 34,304 366,394
Interest expense--
related party ....................... 190,517 92,257 538,885 18,654 369,044
Interest and other income ............. (196,728) (302,223) (165,694) (19,897) (25,356)
Interest income--related party ........ -- (284,931) (415,831) (102,593) (103,038)
----------- ----------- ------------ ----------- -----------
Total other (income) expense ........... 110,577 (385,648) 1,181,383 (69,532) 607,044
----------- ----------- ------------ ----------- -----------
Income (loss) before
income taxes .......................... (751,145) 166,838 5,671,637 (130,883) (779,364)
Income tax benefit ..................... -- (135,474) (350,762) (200,735) (285,680)
----------- ----------- ------------ ----------- -----------
Net income (loss) ...................... $ (751,145) $ 302,312 $ 6,022,399 $ 69,852 $ (493,684)
=========== =========== ============ =========== ===========
Net income (loss) per
common share:
Basic and diluted ..................... $ (.08) $ .03 $ .60 $ .01 $ (.05)
=========== =========== ============ =========== ===========
Weighted average number of
common shares outstanding:
Basic ................................. 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000
=========== =========== ============ =========== ===========
Diluted ............................... 10,000,000 10,000,000 10,093,024 10,000,000 10,309,350
=========== =========== ============ =========== ===========
</TABLE>

See accompanying notes.

F-5
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
PROMISSORY
ADDITIONAL NOTES DUE FOR
PAID-IN PURCHASE OF TOTAL
COMMON CAPITAL COMMON RETAINED SHAREHOLDERS'
STOCK (DEFICIENCY) STOCK EARNINGS EQUITY
----------- -------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 ............. $ 50,000 $ (49,848) $ -- $1,711,482 $ 1,711,634
Net loss ................................ -- -- -- (751,145) (751,145)
-------- ---------- ------------ ---------- -----------
Balance at December 31, 1995 ............. 50,000 (49,848) -- 960,337 960,489
Issuance of 5,000,000 shares
of common stock for cash
of $3,000,000 and
promissory notes (see Note 8) ......... 50,000 9,950,000 (5,000,000) -- 5,000,000
Net income .............................. -- -- -- 302,312 302,312
-------- ---------- ------------ ---------- -----------
Balance at December 31, 1996 ............. 100,000 9,900,152 (5,000,000) 1,262,649 6,262,801
Net income .............................. -- -- -- 6,022,399 6,022,399
-------- ---------- ------------ ---------- -----------
Balance at December 31, 1997 ............. 100,000 9,900,152 (5,000,000) 7,285,048 12,285,200
Net loss ................................ -- -- -- (493,684) (493,684)
-------- ---------- ------------ ---------- -----------
Balance at March 31, 1998
(Unaudited) ............................ $100,000 $9,900,152 $ (5,000,000) $6,791,364 $11,791,516
======== ========== ============ ========== ===========
</TABLE>

See accompanying notes.

F-6
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1996 1997
---------------- ---------------- ----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) ............................... $ (751,145) $ 302,312 $ 6,022,399
Adjustments to reconcile net income (loss)
to net cash (used) provided by operating
activities:
Depreciation and amortization of property
and equipment ................................. 27,846 68,034 222,151
Amortization of intangible assets .............. 5,000 5,000 108,730
Provision for warranties and
product returns ............................... -- -- 465,790
Deferred income taxes .......................... -- (135,474) (350,762)
Provision for bad debts ........................ 54,119 85,348 160,102
Changes in operating assets and liabilities:
Accounts receivable ........................... 802,544 (785,693) (29,256,093)
Inventory ..................................... (186,788) (1,960,918) (16,905,441)
Prepaid expenses and other
current assets .............................. (352,096) 19,237 115,956
Other assets .................................. (2,217) (94,422) 69,988
Due from affiliates ........................... (664,738) 600,855 (1,845,425)
Account receivable from officer ............... (64,738) 2,955 (41,429)
Accounts payable .............................. 143,477 3,339,391 11,644,498
Accrued expenses .............................. (665,317) 91,988 1,703,873
-------------- -------------- --------------
Net cash (used) provided by
operating activities ........................... (1,654,053) 1,538,613 (27,885,663)
INVESTING ACTIVITIES
Purchases of short-term investments ............. (3,405,673) (3,653,038) (2,783,602)
Proceeds from redemptions of
short-term investments ......................... 3,215,058 3,578,637 2,681,000
Acquisition of Durable Electronics
Industries Limited ............................. -- -- (1,292)
Purchase of trademark ........................... -- -- (1,125,000)
Purchases of property and equipment ............. (41,384) (372,798) (984,319)
Proceeds from disposal of property
and equipment .................................. -- -- --
-------------- -------------- --------------
Net cash used in investing activities ........... (231,999) (447,199) (2,213,213)
FINANCING ACTIVITIES
Bank overdraft .................................. -- -- 515,320
Borrowings under line of credit ................. 10,828,382 21,907,626 98,383,924
Repayments on the line of credit ................ (10,385,059) (23,760,843) (76,615,179)
Decrease in notes payable to shareholders ....... -- -- 7,173,564
Decrease in notes payable to affiliates ......... -- -- --
Sale of common stock ............................ -- 3,000,000 --
-------------- -------------- --------------
Net cash provided (used) by financing
activities ..................................... 443,323 1,146,783 29,457,629
-------------- -------------- --------------
Net (decrease) increase in cash and
cash equivalents ............................... (1,442,729) 2,238,197 (641,247)
Cash and cash equivalents, beginning
of period ...................................... 1,876,505 433,776 2,671,973
-------------- -------------- --------------
Cash and cash equivalents, end of period ........ $ 433,776 $ 2,671,973 $ 2,030,726
============== ============== ==============

<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------
1997 1998
--------------- ----------------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) ............................... $ 69,852 $ (493,684)
Adjustments to reconcile net income (loss)
to net cash (used) provided by operating
activities:
Depreciation and amortization of property
and equipment ................................. 29,992 149,144
Amortization of intangible assets .............. 1,328 143,378
Provision for warranties and
product returns ............................... 27,000 (170,790)
Deferred income taxes .......................... (200,741) (285,680)
Provision for bad debts ........................ 8,500 35,718
Changes in operating assets and liabilities:
Accounts receivable ........................... (339,957) 9,868,234
Inventory ..................................... 1,510,618 (2,428,686)
Prepaid expenses and other
current assets .............................. (131,177) (506,912)
Other assets .................................. (58,762) (399,210)
Due from affiliates ........................... (98,630) 974,278
Account receivable from officer ............... (603) 46,763
Accounts payable .............................. (1,901,330) (1,795,687)
Accrued expenses .............................. (94,027) (538,545)
------------- --------------
Net cash (used) provided by
operating activities ........................... (1,177,937) 4,598,321
INVESTING ACTIVITIES
Purchases of short-term investments ............. (454,139) (129,179)
Proceeds from redemptions of
short-term investments ......................... 455,811 127,097
Acquisition of Durable Electronics
Industries Limited ............................. -- --
Purchase of trademark ........................... -- --
Purchases of property and equipment ............. (24,085) (575,222)
Proceeds from disposal of property
and equipment .................................. -- 14,500
------------- --------------
Net cash used in investing activities ........... (22,413) (562,804)
FINANCING ACTIVITIES
Bank overdraft .................................. -- (515,320)
Borrowings under line of credit ................. 5,584,792 22,290,020
Repayments on the line of credit ................ (5,536,329) (25,510,523)
Decrease in notes payable to shareholders ....... -- (38,174)
Decrease in notes payable to affiliates ......... -- (82,401)
Sale of common stock ............................ -- --
------------- --------------
Net cash provided (used) by financing
activities ..................................... 48,463 (3,856,398)
------------- --------------
Net (decrease) increase in cash and
cash equivalents ............................... (1,151,887) 179,119
Cash and cash equivalents, beginning
of period ...................................... 2,671,973 2,030,726
------------- --------------
Cash and cash equivalents, end of period ........ $ 1,520,086 $ 2,209,845
============= ==============
</TABLE>

(CONTINUED)

F-7
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------- ------------------------
1995 1996 1997 1997 1998
----------- ------------- ------------- ----------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid during the period ....................... $302,495 $ 214,343 $1,334,914 $683,621 $51,029
======== ========== ========== ======== =======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Purchase of know-how technology ....................... $ -- $ -- $1,977,613 $ -- $ --
======== ========== ========== ======== =======
Payment of notes payable to investors by
assignment of convertible promissory note
issued by Windmere Corporation ....................... $ -- $2,000,000 $ -- $ -- $ --
======== ========== ========== ======== =======
Sale of common stock paid by promissory notes ......... $ -- $7,000,000 $ -- $ -- $ --
======== ========== ========== ======== =======
</TABLE>

The consolidated statements of cash flows for the year ended December 31, 1997
excludes the effects of certain noncash activities in connection with the
acquisition of Durable Electronics Industries, Limited. The following is a
summary of the noncash effects of this transaction:

<TABLE>
<S> <C>
Allocation of purchase price:
Inventory ............................................................ $ 4,836,552
Prepaid expenses and other assets .................................... 1,044,445
Account receivable from Newtech Electronics Industries, Inc. ......... 5,457,478
Property and equipment ............................................... 1,035,646
Goodwill ............................................................. 630,482
Note payable to affiliate ............................................ (6,219,512)
Accounts payable ..................................................... (5,890,532)
Accrued expenses ..................................................... (296,752)
Due to affiliate ..................................................... (596,515)
------------
$ 1,292
============
</TABLE>

See accompanying notes.

F-8
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997

1. NATURE OF BUSINESS

Newtech Electronics Industries, Inc. (formerly New M-Tech Corporation) and
its wholly-owned subsidiaries (together the Company) design, source,
manufacture, and market high-quality, value-priced brand-name consumer
electronic products. The Company offers a broad line of audio, video and
telecommunications products and selected home appliances, including
televisions, video cassette players and recorders, home audio systems, compact
disc players, cassette players, telephones, and portable microwave ovens. The
Company offers its products under licensed and owned brand names including
White-Westinghouse, Admiral, Philco, Craig and Newtech and also under private
labels. The trademark licenses allow the Company to use the brand name in
specific parts of the world and distribute specific products under these
brands. The Company distributes its products under its own brands on a
worldwide basis.

The Company's business has historically experienced, and the Company
expects to continue to experience, seasonal fluctuations in revenue with a
larger percentage of revenues typically being realized in the third and fourth
fiscal quarters.

Windmere Corporation (Windmere) owns 50% of the Company's outstanding
common stock.

On April 10, 1998, New M-Tech Corporation changed its name to Newtech
Electronics Industries, Inc.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Newtech
Electronics Industries, Inc. and its wholly-owned subsidiaries, Newtech (Hong
Kong), Ltd. (NTHK), Durable Electronics Industries Limited (DEI), and Newtech
Electronics Industries, Limited (NEI) (formerly known as Pomillio, Ltd.). NTHK,
DEI and NEI are foreign corporations organized under the laws of Hong Kong. All
significant intercompany balances and transactions have been eliminated in
consolidation.

CASH AND CASH EQUIVALENTS

The Company defines as cash equivalents all highly liquid investments with
a maturity of three months or less at the time of purchase.

SHORT-TERM INVESTMENTS

Short-term investments are composed primarily of U.S. government
securities with maturity dates throughout 1998. The Company's short-term
investments are recorded at cost, which approximates market value, and are
being held to maturity. The short-term investments are pledged as collateral
under the Company's credit facility.

F-9
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

INVENTORY

Inventory, consisting primarily of consumer electronic products, is stated
at the lower of cost or market, with cost determined on a first-in, first-out
basis. Inventory cost includes product cost, freight-in, import duties, and
other purchasing costs. Inventories consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------- MARCH 31,
1996 1997 1998
------------ ------------- -------------
<S> <C> <C> <C>
Raw materials ........... $ -- $ 2,209,760 $ 4,096,313
Work in process ......... -- -- 58,561
Finished goods .......... 3,445,807 22,978,040 23,461,612
---------- ----------- -----------
$3,445,807 $25,187,800 $27,616,486
========== =========== ===========
</TABLE>

ACCOUNTS RECEIVABLE

The Company's accounts receivable are primarily due from mass
merchandisers and other retailers. Approximately 39%, 72% and 52% of the
accounts receivable balance at December 31, 1996 and 1997 and March 31, 1998,
respectively, is due from the Company's largest customer, Kmart Corporation
(Kmart).

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated depreciation.
Depreciation is recorded on the straight-line method over the estimated useful
lives of the related assets, which range from two to seven years.

INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
AMORTIZATION DECEMBER 31,
PERIOD ---------------------------- MARCH 31,
YEARS 1996 1997 1998
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Trademarks ............................ 10 $ 62,541 $1,187,541 $1,189,175
Purchased know-how technology ......... 6 -- 1,977,613 1,977,613
Goodwill .............................. 5 -- 630,482 630,482
--------- ---------- ----------
62,541 3,795,636 3,797,270
Accumulated amortization .............. (15,941) (124,671) (268,049)
--------- ---------- ----------
$ 46,600 $3,670,965 $3,529,221
========= ========== ==========
</TABLE>

Trademarks consist of amounts paid for licensing agreements and purchased
trademarks which are stated at cost. In December 1997, the Company purchased
certain assets of Craig, including the Craig trademark, for approximately
$1,125,000. Trademark costs also include registration fees incurred to register
the trademarks in various countries.

The know-how technology purchased from DEI on October 1, 1997 includes
rights to certain technology consisting of the know-how, use of certain
computer software, drawings and other technical information regarding the
production of audio products.

F-10
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

Goodwill represents the excess of cost over fair value of net assets
acquired. The Company reviews the carrying value of intangible assets on an
ongoing basis. When factors indicate that an intangible asset may be impaired,
the Company uses an estimate of the undiscounted future cash flows over the
remaining life of the asset in measuring whether the intangible asset is
recoverable. If such an analysis indicates that impairment has in fact
occurred, the unamortized cost of the intangible asset is written down to its
estimated fair value. No such write down has occurred for the years ended
December 31, 1995, 1996 and 1997 and the three months ended March 31, 1998.

REVENUE RECOGNITION

The Company recognizes revenues when title to the goods is passed to the
customer. Generally, this occurs when the products are shipped to its
customers.

Third party manufacturer sales are made in certain circumstances under the
Company's agreement with Kmart (see Note 12). Kmart has the right to procure
the manufacture of products from other manufacturers on behalf of the Company.
In such cases, Kmart pays to the Company the amount payable to the third party
manufacturers plus a percentage of such price. Kmart has the option of paying
third party manufacturers directly or making payment to the Company, in which
case the Company pays the third party manufacturers. In the event that Kmart
fails to make payment to a third party manufacturers, the Company remains
responsible for the payment to the third party manufacturers.

The Company records the selling price to Kmart as revenue and records the
amount payable to the third party manufacturers as cost of products sold. Sales
by third party manufacturers under the Kmart agreement amounted to
approximately $79,100,000 and $14,700,000 for the year ended December 31, 1997
and the three months ended March 31, 1998, respectively. There were no such
sales for the years ended December 31, 1995, 1996, and the three months ended
March 31, 1997.

ALLOWANCE FOR WARRANTIES AND PRODUCT RETURNS

The Company's products are generally sold with a warranty. In the case of
defects in material or workmanship, the Company agrees to replace or repair the
defective product without charge during the warranty period, generally ninety
days from the date of sale.

The effect of warranty and product returns is estimated based on
historical experience and sales are recorded net of a provision for estimated
returns. At December 31, 1996 and 1997 and at March 31, 1998, the Company's
allowance for warranties and product returns is reflective of the historical
claims and returns experience. In 1995, 1996 and 1997, approximately 97%, 83%
and 75%, respectively and for the three months ended March 31, 1997 and 1998
approximately 57% and 73%, respectively, of the Company's gross sales were
under net sales arrangements whereby the Company's customers are responsible
for product defects. The allowance for warranties and product returns was
determined by management to be zero at December 31, 1995 and 1996, $465,790 at
December 31, 1997 and $295,000 at March 31, 1998.

The Company's product returns were $480,570, $120,869 and $2,004,185 for
the years ended December 31,1995, 1996 and 1997, respectively, and $30,569 and
$1,027,000 for the three months ended March 31, 1997 and 1998, respectively. The
product returns do not include recoveries for sales to third parties of
$227,920 and $362,445 for the year ended December 31, 1997 and for the three
months ended March 31, 1998, respectively. For the years ended December 31, 1995
and 1996 and for the three months ended March 31, 1997, there were no sales to
third parties of product returns. Product returns, net of sales to third
parties, were $1,776,265 and $664,555 for the year ended December 31, 1997 and
for the three months ended March 31, 1998, respectively.

FOREIGN CURRENCY TRANSACTIONS

Substantially all purchases and sales of the Company's inventory are
denominated in U.S. dollars.

F-11
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

INCOME TAXES

The Company accounts for income taxes under Statement of Financial
Accounting Standards (SFAS) No. 109, ACCOUNTING FOR INCOME TAXES. Deferred
income tax assets and liabilities are determined based upon differences between
the financial statement and income tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some portion of the
tax assets will not be realized.

NET INCOME (LOSS) PER COMMON SHARE

In 1997, the Company retroactively adopted SFAS No. 128, EARNINGS PER
SHARE. SFAS No. 128 replaced the calculation of primary and fully diluted
earnings per share (EPS) with basic and diluted EPS. The 1996 diluted EPS
calculation includes 2.5 million weighted-average shares of stock subscriptions
not fully paid. The 1997 diluted EPS calculation includes 2.5 million
weighted-average shares of stock subscriptions not fully paid and 309,350 of
dilutive stock options. For the years ended December 31, 1995 and 1996 there is
no difference between the basic and diluted EPS calculations.

Net income per common share is calculated using the weighted average
number of common shares for the basic EPS presentation, and the weighted
average number of common and common equivalent shares for the diluted EPS
presentation, outstanding during the respective periods.

ACCOUNTING FOR STOCK-BASED COMPENSATION

SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, became effective
January 1, 1996. This accounting standard defines a fair value method of
accounting for issuance of stock options and other equity instruments. Under
the fair value method, compensation cost is measured at the grant date based on
the fair value of the award and is recognized over the service period, which is
usually the vesting period. Pursuant to SFAS No. 123, companies are encouraged,
but are not required, to adopt the fair value method of accounting for employee
stock-based transactions. Companies are also permitted to continue to account
for such transactions under Accounting Principles Board Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB Opinion No. 25), but are required
to disclose pro forma net income (loss) and per share amounts as if the Company
had applied the new method of accounting.

The Company applies APB Opinion No. 25 and related interpretations in
accounting for its employee stock-based transactions and Note 10 shows the pro
forma effects required by SFAS No. 123.

CONCENTRATION OF CREDIT AND OTHER RISKS

Many of the Company's sales involve customers' use of irrevocable letters
of credit. In those instances where credit is extended, it is based on the
evaluation of the customer's financial condition. Collateral is generally not
required. Credit losses are provided for in the financial statements and have
been within management's expectations.

The Company's products are principally manufactured in the People's
Republic of China (PRC), both at the Company's manufacturing facility and by
independent manufacturers. The Company has

F-12
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

also engaged independent manufacturers in Indonesia, Malaysia, Mexico,
Thailand, the United States of America (U.S.) and the Philippines.
Manufacturing in the PRC and in other foreign countries subjects the Company to
the risk that political or economic upheaval in these countries could cause
production disruptions and/or increases to its costs, although no such events
have occurred in the past several years. Presently, products imported into the
U.S. from the PRC are subject to favorable duty rates based on the "Most
Favored Nation" status of the PRC (MFN Status). MFN Status is reviewed on an
annual basis by the President and Congress of the U.S. If political or economic
instability in the PRC develops or if higher duties were applied to imports
into the U.S., the Company could experience an adverse impact on its cost of
sales and earnings.

INTERIM FINANCIAL DATA

In the opinion of the management of the Company, the accompanying
unaudited financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the financial
position of the Company as of March 31, 1998, the results of operations and
cash flows for the three months ended March 31, 1997 and 1998 and the changes
in shareholders' equity for the three months ended March 31, 1998.

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Accordingly, actual results could differ from those
reported.

RECLASSIFICATIONS

Certain amounts in the 1995 and 1996 financial statements have been
reclassified to conform to the 1997 financial statement presentation.

NEW ACCOUNTING PRONOUNCEMENTS

REPORTING COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, REPORTING COMPREHENSIVE INCOME. SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components in financial
statements. SFAS No. 130 is effective for fiscal years beginning after December
15, 1997. Reclassification will be required of financial statements for earlier
periods. The Company is in the process of evaluating the disclosure
requirements of SFAS No. 130. The adoption of SFAS No. 130 is not expected to
have a material impact on the Company's consolidated operations, financial
condition or cash flows.

DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

In June 1997, the FASB issued SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 131 establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those

F-13
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

enterprises report selected information about operating segments in annual
financial statements and in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about products and
services, geographic areas, and major customers. SFAS No. 131 is effective for
financial statements for fiscal years beginning after December 15, 1997.
Financial statement disclosures for prior periods are required to be restated.
The Company is in the process of evaluating the disclosure requirements of SFAS
No. 131. The adoption of SFAS No. 131 will have no impact on the Company's
consolidated operations, financial condition or cash flows.

3. ACQUISITION

On October 1, 1997, the Company purchased DEI's rights to certain
technology consisting of the know-how, use of certain computer software,
drawings and other technical information (know-how technology). At the time,
DEI was a wholly-owned subsidiary of Durable Metal Factory Limited (DEM), a
subsidiary of Windmere-Durable Holdings, Inc. DEI, which was incorporated on
December 11, 1996, operates a manufacturing facility located in the PRC which
the Company utilizes for the production of audio products. The purchase price
for the know-how technology was determined by management to be $1,977,613 and
was paid for by the Company in the form of a note payable to DEI. The terms of
the note payable require an $82,403 payment on March 3, 1998 and 23 equal
quarterly installments of $82,400 beginning on March 31, 1998. The unpaid
balance bears interest at one percent above the prime rate, as defined (9.5% at
December 31, 1997). Interest is payable quarterly. DEI assigned the note
payable to DEM on November 1, 1997. This note payable to affiliate has been
guaranteed by the Company.

On November 1, 1997, NEI purchased all the outstanding shares of common
stock of DEI, in exchange for $1,292 in cash. The acquisition was accounted for
as a purchase and accordingly, operations of DEI have been reflected in the
consolidated statement of operations from November 1, 1997. The purchase price
exceeded the fair value of the net assets acquired by approximately $630,000.
This amount was classified as goodwill and is being amortized over five years.
Included in the net assets acquired is the assumption of a note payable to DEM
of $6,219,512, which is to be repaid on October 31, 2003 and bears interest at
one percent above the prime rate, as defined (9.5% at December 31, 1997). This
note payable to affiliate has been guaranteed by the Company.

DEM has also agreed to loan up to $500,000 on a demand basis to DEI, the
amount of which loan may be increased at the sole discretion of DEM. The
proceeds of the loan may be used for equipment acquisitions and working capital
needs. Unless demand is made prior to such time, the loan will be payable on
October 31, 2003 and will bear interest at one percent above the prime rate, as
defined (9.5% at December 31, 1997). Amounts advanced under this loan were $0
and $329,000 at December 31, 1997 and March 31, 1998, respectively. These
advances to DEI are guaranteed by the Company.

DEM has also agreed to loan up to $500,000 on a demand basis to DEI, the
amount of which loan may be increased at the sole discretion of DEM. The
proceeds of the loan may be used for equipment acquisitions and working capital
needs. Unless demand is made prior to such time, the loan will be payable on
October 31, 2003 and will bear interest at one percent above the prime rate, as
defined (9.5% at December 31, 1997). At December 31, 1997, DEM had not made any
loan advances to DEI. Any advances to DEI will be guaranteed by the Company.

F-14
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. ACQUISITION--(CONTINUED)

The following table summarizes, on an unaudited pro forma basis, the
result of operations for the year ended December 31, 1997, as though the
acquisition of DEI had occurred as of the beginning of the year (IN THOUSANDS,
EXCEPT PER SHARE DATA):

<TABLE>
<S> <C>
Net sales .......................... $ 208,417
Income before income taxes ......... 3,714
Net income ......................... 4,065
Earnings per share:
Basic ............................. 0.41
Diluted ........................... 0.40
</TABLE>

4. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES ----------------------------- MARCH 31,
(IN YEARS) 1996 1997 1998
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Machinery and equipment .......... 5 $ 147,638 $ 949,240 $1,188,836
Furniture and fixtures ........... 7 122,485 443,124 325,321
Automobiles ...................... 5 10,925 16,408 16,408
Molds and tools .................. 3 164,700 759,361 1,188,999
Leasehold improvements ........... 2-4 61,050 358,631 367,918
---------- ---------- ----------
506,798 2,526,764 3,087,482
Accumulated depreciation ......... (126,858) (349,010) (498,150)
---------- ---------- ----------
$ 379,940 $2,177,754 $2,589,332
========== ========== ==========
</TABLE>

At December 31, 1997 and March 31, 1998, DEI had entered into commitments
to purchase certain molds amounting to $333,850 and $239,209, respectively.

5. LINE OF CREDIT

On July 31, 1995, the Company entered into a $14 million credit facility
with a bank which provided up to $5 million in direct borrowings, with the
balance available for letters of credit. On July 23, 1997, the Company replaced
the $14 million credit facility with a new credit facility with the existing
lender and two additional banks. Direct borrowings under the credit facility
are subject to an availability calculation based on the eligible borrowing
base. The credit facility provides for aggregate borrowings and issuances of
letters of credit of up to $37 million, of which $32 million may be used for
direct borrowings. Direct borrowings under the credit facilities were $27,701,
$21,796,446 and $18,575,943 at December 31, 1996 and 1997 and March 31, 1998,
respectively, and outstanding letters of credit for the purpose of purchasing
inventory totaled $4,651,000, $6,209,021 and $8,846,752, at December 31, 1996
and 1997 and March 31, 1998, respectively. The outstanding balance under the
credit facility accrues interest at the prime rate, as defined (8.5% at
December 31, 1997 and March 31, 1998) for direct borrowings under $10 million
and at the prime rate plus 1% (9.5% at December 31, 1997 and March 31, 1998)
for borrowings over $10 million. The credit facility expires June 30, 1998 and
is secured by all assets of the Company and certain guarantees of the
shareholders.

Based on the availability calculation, approximately $9.3 million, $7.5
million and $3.2 million of additional borrowings were available under this
credit facility at December 31, 1996 and 1997 and

F-15
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. LINE OF CREDIT--(CONTINUED)

March 31, 1998, respectively. The weighted average interest rate was 7.9%,
11.4% and 8.7% at December 31, 1996 and 1997 and March 31, 1998, respectively.

The credit facility contains certain covenants that, among other things,
restrict the payment of dividends and restrict additional indebtedness and
obligations, and require maintenance of certain financial ratios.

6. NOTES PAYABLE TO AFFILIATE AND SHAREHOLDERS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
-------------- -------------
<S> <C> <C>
Notes payable to affiliate ............ $ 8,197,125 $8,114,724
Notes payable to shareholders ......... 7,173,564 7,135,390
----------- ----------
15,370,689 15,250,114
Less current portion .................. 7,585,569 7,464,994
----------- ----------
Long-term portion ..................... $ 7,785,120 $7,785,120
=========== ==========
</TABLE>

In June 1997, Windmere, a shareholder, provided the Company with a $2
million loan for working capital purposes. The loan bears interest at the rate
of two percent above the prime rate, as defined (10.5% at December 31, 1997),
is unsecured and payable on demand.

In September 1997, Windmere provided the Company with a revolving loan
which was evidenced by a note in the principal amount of $3,091,352, to be used
for working capital purposes. The revolving note is payable on demand at any
time on or after December 31, 1997 and pays interest at two percent above the
prime rate, as defined (10.5% at December 31, 1997). In the event that the
Company fails to pay any amounts due under the revolving note, Windmere will be
entitled to offset any such amounts by a reduction of the $5 million promissory
notes payable to the Company by Windmere (see Note 8).

The outstanding balance on these two loans from Windmere was $5,067,701
and $5,135,389 at December 31, 1997 and March 31, 1998, respectively. Interest
paid to Windmere on these loans amounted to approximately $172,000 and $92,000
for the year ended December 31, 1997 and the three months ended March 31, 1998,
respectively.

In July 1997, a shareholder provided the Company with a $2 million loan
for working capital purposes. The loan bears interest at the rate of two
percent above the prime rate, as defined (10.5% at December 31, 1997), is
unsecured and payable on demand. The outstanding balance on this loan was
$2,105,863 and $2,000,000, at December 31, 1997 and March 31, 1998,
respectively. The outstanding balance includes accrued interest of $105,863 at
December 31, 1997. Interest on this loan was paid as of March 31, 1998.

In connection with the October 1, 1997 purchase of DEI's rights to certain
know-how technology, NEI entered into a $1,977,613 note payable to DEI. DEI
assigned the note payable to DEM on November 1, 1997. The terms of the note
require an $82,403 payment on March 3, 1998 and 23 equal quarterly installments
of $82,400 beginning on March 31, 1998. The unpaid balance bears interest at
one percent above the prime rate, as defined (9.5% at December 31, 1997).
Interest is payable quarterly.

F-16
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. NOTES PAYABLE TO AFFILIATE AND SHAREHOLDERS--(CONTINUED)

DEI has a note payable to DEM of $6,219,512 which is to be repaid on
October 31, 2003 and bears interest at one percent above the prime rate, as
defined (9.5% at December 31, 1997). Interest is payable quarterly.

Maturities of the notes payable to affiliate as of December 31, 1997, are
as follows:

<TABLE>
<S> <C>
1998 ............... $ 412,005
1999 ............... 329,604
2000 ............... 329,604
2001 ............... 329,604
2002 ............... 329,604
2003 ............... 6,466,704
----------
Total .............. $8,197,125
==========
</TABLE>

7. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, short-term investments,
accounts receivable, amounts due under the line of credit, accounts payable and
accrued expenses approximate fair value because of their short duration to
maturity. The carrying amounts of the notes payable to affiliate and notes
payable to shareholders approximates fair value because their interest rates
are tied to a quoted variable index.

8. EQUITY TRANSACTIONS

On April 15, 1996, the Company effected a reverse one-for-two stock split
and issued five million shares of common stock to Windmere pursuant to a stock
purchase agreement between the Company and Windmere (the Stock Purchase
Agreement). As part of this transaction, the Company's then sole shareholder
contributed all of his shares in NTHK to the Company in a transaction that was
accounted for using the pooling of interests method of accounting and,
accordingly, the Company's consolidated financial statements were restated to
include the accounts and operations of NTHK for the periods prior to the
transaction.

Combined and separate results of the merged entities are presented in the
following table:

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 1, 1996
DECEMBER 31, THROUGH APRIL 15,
1995 1996
-------------- ------------------
(UNAUDITED)
<S> <C> <C>
Net sales
Newtech Electronics Industries ......... $ 2,254,301 $ 429,294
NTHK ................................... 11,098,710 1,163,510
----------- ------------
Combined ............................... $13,353,011 $ 1,592,804
=========== ============
Net income (loss)
Newtech Electronics Industries ......... $ (966,981) $ (377,416)
NTHK ................................... 215,836 (1,166,858)
----------- ------------
Combined ............................... $ (751,145) $ (1,544,274)
=========== ============
</TABLE>

F-17
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. EQUITY TRANSACTIONS--(CONTINUED)

The Stock Purchase Agreement called for Windmere to pay $10 million in
exchange for 5,000,000 shares of the Company's common stock, issued by the
Company payable as follows: $3 million in cash and the issuance, by Windmere,
of three notes: a $3 million, 8% promissory note due April 15, 1998; a $2
million, 8% promissory note due April 15, 2001; and a $2 million convertible
promissory note due April 15, 2001. The $2 million convertible promissory note
was simultaneously assigned to the holders of $2 million in notes payable by
the Company in exchange for the notes payable.

9. INCOME TAXES

The components of the benefit for income taxes are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------- -----------------------------
1995 1996 1997 1997 1998
------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Current ................ $-- $ -- $ -- $ -- $ --
Deferred--U.S. ......... -- (135,474) (350,762) (200,735) (285,680)
--- ---------- ---------- ---------- ----------
Total ................. $-- $ (135,474) $ (350,762) $ (200,735) $ (285,680)
=== ========== ========== ========== ==========
</TABLE>

The differences between the reported benefit from income taxes and income
taxes computed at the U.S. statutory federal income tax rate are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------------ ------------------------------
1995 1996 1997 1997 1998
-------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Income tax expense
(benefit) computed at the
U.S. statutory rate of
34% .......................... $ (255,389) $ 56,725 $ 1,928,357 $ (44,500) $ (264,984)
Change in deferred tax
valuation allowance .......... 381,598 (452,571) -- -- --
Effect of non-U.S.
operations and tax rates ..... (73,384) (85,600) (2,264,472) (150,499) (1,721)
Remitted earnings of
foreign subsidiary ........... -- 286,421 -- -- --
Other, net .................... (52,825) 59,551 (14,647) (5,736) (18,975)
---------- ---------- ------------ ---------- ----------
Total ...................... $ -- $ (135,474) $ (350,762) $ (200,735) $ (285,680)
========== ========== ============ ========== ==========
</TABLE>

F-18
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. INCOME TAXES--(CONTINUED)

Significant components of the Company's net deferred income taxes are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- ----------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforward ......... $135,887 $261,168 $597,623
Allowance for bad debts ................. -- 56,445 69,886
Warranties .............................. -- 175,277 111,009
Other deferred tax assets ............... -- 1,285 2,088
-------- -------- --------
Total current deferred tax asset ......... 135,887 494,175 780,606
Deferred tax liability:
Miscellaneous accruals .................. (413) (7,939) --
-------- -------- --------
Net deferred tax asset ................... $135,474 $486,236 $780,606
======== ======== ========
</TABLE>

At December 31, 1997, the Company has net operating loss carryforwards for
income tax purposes of approximately $695,000, which expire in various amounts
in the year from 2010 to 2012. No valuation allowance has been established for
the net deferred tax asset, because, in the opinion of management, the deferred
tax asset will be realized.

The income (loss) before provision for income taxes consisted of the
following for the year ended December 31:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------------ -------------------------------
1995 1996 1997 1997 1998
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
United States ......... $ (966,980) $ (84,929) $ (988,573) $ (573,528) $ (774,301)
Non--U.S. ............. 215,835 251,767 6,660,210 442,645 (5,063)
---------- ---------- ---------- ---------- ----------
Total ............... $ (751,145) $ 166,838 $5,671,637 $ (130,883) $ (779,364)
========== ========== ========== ========== ==========
</TABLE>

U.S. income taxes have not been provided on the undistributed earnings of
the Company's foreign subsidiaries because the Company intends to reinvest
these earnings indefinitely. Cumulative undistributed earnings of the Company's
foreign subsidiaries amounted to approximately $2,694,800, $2,154,200 and
$7,486,600 at December 31, 1995, 1996 and 1997.

10. COMMON STOCK

On April 3, 1998, the Company amended and restated its Articles of
Incorporation to increase the number of shares of authorized capital stock to
51,000,000 shares, consisting of 50,000,000 shares of common stock, par value
$.01 per share and 1,000,000 shares of preferred stock, par value $.01.

On April 3, 1998, the Company effected a stock split of 10,000 for one.
The financial statements have been restated to give retroactive recognition to
the stock split in the prior periods, including all references in the financial
statements to number of shares and per share amounts.

On February 28, 1997, the Company adopted the 1997 Stock Option Plan (the
Plan). Pursuant to the terms of the Plan, incentive stock options and
non-qualified stock options may be granted to eligible

F-19
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

10. COMMON STOCK--(CONTINUED)

employees, consultants, directors and independent contractors of the Company,
or its subsidiaries. The Company has reserved 1,000,000 shares of its common
stock for issuance under the Plan. The vesting period and the terms of the
incentive stock options and the non-qualified stock options granted are
administered by either a Committee established by the Board of Directors (the
Committee) or the Board of Directors. Upon adoption of the Plan, the Company
granted non-qualified stock options to its employees to purchase 618,700 shares
of its common stock at an exercise price of $2.00 per share. The $2.00 exercise
price was determined by the Board of Directors to be the fair value of the
underlying common stock at the date of grant. On October 27, 1997 and November
30, 1997, non-qualified stock options amounting to 29,900 and 400,
respectively, were granted to employees pursuant to the Plan. The exercise
price of these non-qualified stock options is $4.00 and was determined by the
Board of Directors to be the fair value of the underlying common stock at the
date of grant. As a result, no compensation cost has been recognized under the
provisions of APB Opinion No. 25. At December 31, 1997, 351,000 shares remained
available for future grants. Options vest one fifth each year beginning on the
first anniversary of the date of grant and become 100% vested on the fifth
anniversary of the date of grant. At December 31, 1997, none of these options
were vested. The non-qualified stock options expire no later than ten years
from the date of grant.

The Company has adopted only the disclosure provisions of SFAS No. 123.
Accordingly, no compensation cost has been recognized for the Plan. Had
compensation cost for the Plan been determined based on the fair value of the
stock options on the grant date for awards issued in 1997 consistent with the
provisions of SFAS No. 123, the Company's net earnings and EPS would have been
reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
---------------
<S> <C>
Net income--pro forma ......................... $ 5,986,932
Basic earnings per share--pro forma ........... 0.60
Diluted earnings per share--pro forma ......... 0.59
</TABLE>

The fair value of each option grant is estimated on the date of grant
using the Minimum Value fair value model with the following weighted-average
assumptions used for grants in 1997: dividend yield of 0.0%; risk-free interest
rate of 6.39% and average expected life of five years.

At December 31, 1997, the weighted average exercise price of the options
outstanding is $2.10 and the weighted average remaining contractual life of
those options is four years.

11. RELATED PARTY TRANSACTIONS

In June 1997, the Company entered into an agreement with F Fifty Holdings,
Inc. for the lease of a jet aircraft. F Fifty Holdings, Inc. is wholly owned by
a shareholder of the Company. The term of the lease is from June 1, 1997
through June 30, 2007 and requires annual rental payments of $150,000. The
Company also pays an additional hourly fee at the current market rate based on
the utilization of the aircraft. The Company made payments to F Fifty Holdings,
Inc. amounting to approximately $246,000 and $123,000 for the year ended
December 31, 1997 and three months ended March 31, 1998, respectively. The
Company provided this affiliated entity noninterest bearing advances amounting
to $330,000 and $359,000 at December 31, 1997 and March 31, 1998. These amounts
are included in due from affiliates. The Company received $90,000 and $45,000
from Windmere for the use of the aircraft during the year ended December 31,
1997 and the three months ended March 31, 1998, respectively.

F-20
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

11. RELATED PARTY TRANSACTIONS--(CONTINUED)

Also included in due from affiliates at December 31, 1997 and March 31,
1998 is $125,000 due from Electronics Industries of America, Inc., an inactive
entity which is wholly owned by the shareholders of the Company and holds a
license to distribute microwave ovens under the Philco brand name. On April 3,
1998 this entity was merged into Newtech Electronics Industries, Inc. with
Newtech Electronics Industries, Inc. being the surviving entity.

Windmere provides the Company with certain administrative services with
respect to DEI for a monthly management fee of approximately $11,800. The
Company has paid Windmere a total of approximately $93,200 for the year ended
December 31, 1997 and $35,400 for the three months ended March 31, 1998.
Additionally, DEM pays certain expenses on behalf of DEI and collects accounts
receivable on behalf of DEI. At December 31, 1997, DEM owed DEI $829,000. This
amount is included in due from affiliates. At March 31, 1998, DEI owed DEM
$329,000. This amount is included in due to affiliates.

The Company has an unsecured loan receivable from a shareholder, due on
demand and bearing interest at 7% per annum. The outstanding balance of this
loan amounted to approximately $230,000, $271,000 and $224,000, at December 31,
1996 and 1997 and March 31, 1998, respectively. Interest income on the loan
amounted to $15,100, $16,300, $15,800, $4,000 and $4,400, for the years ended
December 31, 1995, 1996 and 1997 and the three months ended March 31, 1997 and
1998, respectively.

During 1997, the Company entered into various notes payable to affiliate
and shareholders (see Note 6). Interest expense associated with these notes
amounted to $465,643 and $369,044 for the year ended December 31, 1997 and the
three months ended March 31, 1998, respectively. Of this amount, $359,780 for
the year ended December 31, 1997 and $134,497 for the three months ended March
31, 1998 related to interest on the notes payable to Windmere and its
affiliate.

In certain instances Windmere may pay for expenditures on behalf of the
Company which are reimbursed by the Company. Amounts payable to Windmere for
these expenditures totaling $1,099,549 and $160,093 are included in accounts
payable at December 31, 1997 and March 31, 1998, respectively.

The Company made payments to a shareholder amounting to $72,000, $42,000,
$18,000 and $0 for the years ended December 31, 1996 and 1997 and the three
months ended March 31, 1997 and 1998, respectively, for the use of his personal
assets as collateral on the Company's credit facility (see Note 5).

On April 15, 1996, the Company entered into an agreement with Windmere
which resulted in the issuance to the Company of $5 million in promissory notes
(see Note 8). Interest income on these promissory notes amounted to $284,931,
$400,000, $98,630 and $98,630 for the years ended December 31, 1996 and 1997
and the three months ended March 31, 1997 and 1998, respectively. Accrued
interest receivable on these promissory notes amounted to $100,822 at December
31, 1996 and 1997, and $199,452 at March 31, 1998. This amount is included in
due from affiliates.

During 1996, Newtech Do Brazil, a company under common ownership and
control, closed its operations. As a result, the Company wrote off $980,018 due
from this affiliate. Sales to Newtech Do Brazil amounted to $1,395,000 and
$502,541 for the years ended December 31, 1995 and 1996, respectively.

12. SUPPLY CONTRACT AND SIGNIFICANT CUSTOMERS

The Company entered into a seven and a half year supply contract with
Kmart on January 27, 1997, pursuant to which the Company appointed Kmart as the
exclusive discount department store to market

F-21
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. SUPPLY CONTRACT AND SIGNIFICANT CUSTOMERS--(CONTINUED)

and sell a broad range of audio, video and telecommunications products in the
U.S. under the White-Westinghouse brand name. The agreement provides for
minimum purchases, subject to adjustment, by Kmart applied to specific product
categories. The minimum purchases by Kmart increase from $135 million for the
18 month period ending June 30, 1998 to $171 million for the 12 month period
ending June 30, 2004. Sales to Kmart, amounted to approximately $0,
$14,441,000, $158,734,000, $4,112,000 and $28,866,000 for the years ended
December 31, 1995, 1996, and 1997 and the three months ended March 31, 1997 and
1998, respectively, representing 0%, 37%, 76%, 49% and 74% of net sales in each
of these periods, respectively.

Sales to certain other customers, each constituting 10% or more of total
sales, were approximately $7,172,000, $22,040,000, $0, $3,788,000 and $0 for
the years ended December 31, 1995, 1996 and 1997 and the three months ended
March 31, 1997 and 1998, respectively.

13. GEOGRAPHIC INFORMATION

In addition to its U.S. operations, the Company has subsidiaries in Hong
Kong. All significant intercompany revenues and expenses are eliminated in
computing revenues and operating income.

Segment information by geographic area is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------------- ------------------------------
1995 1996 1997 1997 1998
-------------- -------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
UNITED STATES
Net sales ........... $ 2,254,301 $14,852,520 $129,530,298 $3,814,777 $24,952,395
Loss from
operations ......... (1,447,307) (378,375) (714,324) (785,449) (509,519)
HONG KONG
Net sales ........... 11,098,710 24,207,616 78,886,314 $4,605,164 $13,947,787
Income from
operations ......... 806,739 159,565 7,567,344 585,034 337,199
</TABLE>

Identifiable assets by geographic area are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ MARCH 31,
1996 1997 1998
------------- -------------- --------------
<S> <C> <C> <C>
United States ......... $7,086,477 $51,667,843 $46,005,496
Hong Kong ............. 3,285,823 16,925,577 16,050,784
</TABLE>

F-22
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

13. GEOGRAPHIC INFORMATION--(CONTINUED)

The Company had sales to unrelated customers outside the U.S. of
approximately $5,527,000, $6,204,000, $9,084,000, $1,118,000 and $1,018,000 for
the years ended December 31, 1995, 1996 and 1997 and three months ended March
31, 1997 and 1998, respectively. These sales were made principally to customers
in Mexico, Central, and South America and the Caribbean. The geographic area
which includes these sales is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------------------------- ----------------------------
1995 1996 1997 1997 1998
------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
United States ......... $ 499,000 $ 612,000 $2,393,000 $ -- $ 537,000
Hong Kong ............. 5,028,000 5,592,000 6,691,000 1,118,000 481,000
---------- ---------- ---------- ---------- ----------
Total ................ $5,527,000 $6,204,000 $9,084,000 $1,118,000 $1,018,000
========== ========== ========== ========== ==========
</TABLE>

14. COMMITMENTS AND CONTINGENCIES

The Company leases office space and a manufacturing facility under
operating leases which expire at various dates through 2001. The Company also
leases an aircraft from a corporation that is wholly-owned by a shareholder of
the Company through June 30, 2007 (see Note 11).

Future minimum payments under operating leases at December 31, 1997 are
approximately as follows:

<TABLE>
<S> <C>
Year ending December 31:
1998 ....................... $ 621,800
1999 ....................... 632,600
2000 ....................... 484,000
2001 ....................... 504,000
2002 ....................... 150,000
Thereafter .................. 675,000
----------
Total ....................... $3,067,400
==========
</TABLE>

Total rent expense for the years ended December 31, 1995, 1996 and 1997
and the three months ended March 31, 1997 and 1998 was approximately $96,000,
$130,000, $714,000, $64,000, and $84,000, respectively.

The Company has license agreements with White Consolidated Industries,
Inc. (White Consolidated). The initial term of the agreement is through
December 31, 1998, and may be extended at the Company's option for up to
fourteen one-year renewal terms through December 31, 2012. The current level of
royalty payments are in excess of the minimum requirements. The Company also
has various license agreements with other parties which may be extended at the
Company's option, with renewal terms ranging from December 31, 2003 to December
31, 2015. The agreements are typically renewable upon mutual consent. These
license agreements require royalty payments based on the sales of licensed
product in a given period. Total royalties under these agreements, including
the White Consolidated agreement, were $31,000, $339,000, $2,902,000, $79,000
and $527,000 for the years ended December 31, 1995, 1996 and 1997 and the three
months ended March 31, 1997 and 1998, respectively.

F-23
<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

14. COMMITMENTS AND CONTINGENCIES--(CONTINUED)

Future minimum royalty guarantees, at December 31, 1997 are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1998 .................. $ 3,405,000
1999 .................. 3,025,000
2000 .................. 3,025,000
2001 .................. 3,025,000
2002 .................. 3,025,000
2003 .................. 325,000
-----------
Total .................. $15,830,000
===========
</TABLE>

The Company, White Consolidated, Windmere and certain other parties have
been named as defendants in litigation filed by Westinghouse Electric
Corporation (Westinghouse) in the United States District Court for the Western
District of Pennsylvania on December 18, 1996. The action arises from a dispute
between Westinghouse and White Consolidated over rights to use the
"Westinghouse" trademark for consumer products, based on transactions between
Westinghouse and White Consolidated in the 1970's and the parties' subsequent
conduct. Procedural motions concerning the jurisdiction in which the dispute
should be heard have been filed by the parties. The action seeks, among other
things, a preliminary injunction enjoining the defendants from using the
trademark, unspecified damages and attorneys' fees. Pursuant to the Company's
license agreements with White Consolidated, White Consolidated is defending the
Company and is obligated to indemnify the Company from and against any and all
costs and expenses of claims, losses and damages arising out of the action,
including the costs of litigation. An adverse decision in this litigation could
result in the Company being limited in further use of the Westinghouse
trademark and in termination or significant modification of the Kmart
agreement, any of which would have a material adverse effect on the Company's
business, financial condition and results of operations. In the event that a
favorable outcome for the Company is not obtained, the Company intends to
vigorously pursue its rights to indemnification under the license agreements
described above.

15. SUBSEQUENT EVENTS (UNAUDITED)

On June 8, 1998, the Company entered into a three year $105 million
revolving credit facility with a group of banks. The facility is secured by
substantially all of the Company's assets. Proceeds from the new credit
facility were used to repay all outstanding amounts under the Company's then
current credit facility and all of the shareholder indebtedness. The facility
will also be used to finance working capital requirements, including trade
financing activities. The credit facility includes a $2.0 million sub-facility
for the issuance of standby letters of credit and a $10.0 million sub-facility
for the creation of bankers' acceptances. Under the facility, the Company is
required to comply with certain financial covenants and is subject to
limitations on capital expenditures and capital and other distributions.
Availability under the credit facility is based on a formula of eligible
receivables, inventories and letters of credit issued by the Company.
Availability based on accounts receivable ranges from 40% for unsecured foreign
accounts receivable to 90% for accounts receivable from certain customers that
are secured by a standby letter of credit. Interest on advances under the
revolving credit facility is based on the Company's leverage ratio which enable
the Company to select either the prime rate or LIBOR plus a percentage, as
defined.

F-24
<PAGE>

No dealer, salesperson or other person has been authorized to give any
information or to make any representation other than those contained in this
Prospectus in connection with the offer contained herein, and if given or made,
such information or representation must not be relied upon as having been
authorized by the Company, the Selling Shareholders or any Underwriter. This
Prospectus does not constitute an offer to sell or a solicitation of an offer
to buy, shares of Common Stock in any jurisdiction where or to any person to
whom it is not lawful to make any such offer or solicitation in such
jurisdiction or in which the person making such offer or solicitation is not
qualified to do so. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof.

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
Prospectus Summary ........................... 3
Risk Factors ................................. 7
Use of Proceeds .............................. 18
Dividend Policy .............................. 18
Capitalization ............................... 19
Dilution ..................................... 20
Selected Consolidated Financial Data ......... 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................ 22
Business ..................................... 32
Management ................................... 45
Certain Transactions ......................... 50
Principal and Selling Shareholders ........... 53
Description of Capital Stock ................. 54
Shares Eligible for Future Sale .............. 57
Certain United States Tax Consequences to
Non-U.S. Holders .......................... 59
Underwriting ................................. 61
Legal Matters ................................ 62
Experts ...................................... 62
Additional Information ....................... 62
Index to Financial Statements ................ F-1
</TABLE>

Until , 1998 (25 days after the date of this Prospectus), all dealers
effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligations of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

PROSPECTUS, 1998

[LOGO]

Newtech Electronics Industries, Inc.

Common Stock

Warburg Dillon Read LLC

Jefferies & Company, Inc.
<PAGE>

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses (other than underwriting discounts and commissions) of
the sale of the shares of Common Stock are as follows:

<TABLE>
<S> <C>
SEC registration fee ....................... $ 30,533
NASD filing fee ............................ 10,850
Nasdaq National Market listing fee ......... *
Legal fees and expenses .................... *
Accounting fees and expenses ............... *
Printing and engraving expenses ............ *
Transfer agent and registrar fees .......... 10,000
Miscellaneous fees and expenses ............ *
--------
Total ...................................... $
========
</TABLE>

- ----------------
* To be provided by amendment.

All amounts, except the Securities and Exchange Commission registration
fee, the NASD filing fee and the Nasdaq National Market listing fee, are
estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has authority under Section 607.0850 of the FBCA to
indemnify its directors and officers to the extent provided for in such
statute. The Registrant's Amended and Restated Articles of Incorporation
provide that the Registrant will indemnify and may insure its officers and
directors to the full extent not prohibited by law. The Registrant has also
entered into an agreement (the form of which is filed as Exhibit 10.1 hereto)
with each of its directors and executive officers where it has agreed to
indemnify each of them to the fullest extent permitted by law. In general,
Florida law permits a Florida corporation to indemnify its directors, officers,
employees and agents, and persons serving at the corporation's request in such
capacities for another enterprise, against liabilities arising from conduct
that such persons reasonably believed to be in, nor not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.

Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this
Registration Statement, the Underwriter has agreed to indemnify the directors,
officers and controlling persons of the Registrant against certain civil
liabilities that may be incurred in connection with the Offering, including
certain liabilities under the Securities Act of 1933, as amended,

Section of the Underwriting Agreement (to be filed as Exhibit 1.1 to
this Registration Statement) provides that the Underwriters severally and not
jointly will indemnify and hold harmless the Registrant and each director,
officer and controlling person of the Registrant from and against any liability
caused by any statement or omission in the Registration Statement, in the
Prospectus, in any Preliminary Prospectus or in any amendment of supplement
thereto, in each case to the extent that the statement or omission was made in
reliance upon and in conformity with written information furnished to the
Registrant by the Underwriters expressly for use therein.

II-1
<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

No securities that were not registered under the Securities Act have been
issued or sold by the Registrant within the past three years except as follows:

<TABLE>
<CAPTION>
DATE OF SALE
AMOUNT AND TYPE OF SECURITIES OR ENTITLEMENT PURCHASER(S) CONSIDERATION
- ---------------------------------- ---------------- ------------------------------- --------------
<S> <C> <C> <C>
5,000,000 shares of Common Stock April 16, 1996 Windmere Holdings Corporation $10,000,000
</TABLE>

The aforementioned issuances and sales were made in reliance upon the
exemption from the registration provisions of the 1933 Act afforded by Section
4(2) thereof and/or Regulation D promulgated thereunder, as transactions by an
issuer not involving a public offering. The purchasers of the securities
described above acquired them for their own account and not with a view to any
distribution thereof to the public. The certificates evidencing the securities
bear legends stating that the securities may not be offered, sold or
transferred other than pursuant to an effective registration statement under
the 1933 Act, or an exemption from such registration requirements. The
Registrant will place stop transfer instructions with its transfer agent with
respect to all such securities.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as exhibits to this Registration
Statement:

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- ------------
<S> <C>
1.1 Form of Underwriting Agreement.**
3.1 Amended and Restated Articles of Incorporation of the Registrant.*
3.2 Articles of Amendment to Articles of Incorporation filed April 10, 1998.*
3.3 Amended and Restated Bylaws of the Registrant.*
4.1 See Exhibits 3.1 and 3.2 for provisions in the Registrant's Articles of Incorporation and Bylaws
defining the rights of holders of the Registrant's Common Stock.*
4.2 Form of Registrant's Common Stock Certificate.
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. with respect to legality
of the Common Stock being issued.**
10.1 Form of Indemnification Agreement between the Registrant and each of its directors and
executive officers.*
10.2 Registrant's 1997 Stock Option Plan.*
10.3 + Trademark User Agreement dated as of October 1, 1993 among Maytag Corporation, Maytag
International, Inc., the Registrant and Newtech (Hong Kong) Ltd.*
10.4 + Trademark License Agreement dated as of May 1, 1996 between the Registrant and White
Consolidated Industries, Inc., as amended.
10.5 + Trademark License Agreement dated as of September 15, 1997 between the Registrant and
White Consolidated Industries, Inc., as amended.
10.6 + Trademark License Agreement dated as of September 15, 1997 between the Registrant and
White Consolidated Industries, Inc., as amended.
10.7 Purchase and Distribution Agreement dated as of January 6, 1997 between the Registrant and
AAAA World Import Export, Inc.*
10.8 + Purchase, Distribution and Marketing Agreement dated as of January 27, 1997 between the
Registrant and Kmart Corporation.*
10.9 Guaranty dated January 27, 1997 among Windmere-Durable Holdings, Inc., Kmart
Corporation and the Registrant.*
10.10 Indemnification Agreement dated as of January 23, 1997 among White Consolidated
Industries, Inc., Kmart Corporation and Windmere-Durable Holdings, Inc.*
10.11 Deed of Assignment of Industrial Know-How dated as of October 1, 1997 between Durable
Electronics Industries Limited and Pomillo Limited*
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- -----------------------------------------------------------------------------------------------
<S> <C>
10.12 Loan Agreement dated as of October 1, 1997 among Durable Electronics Industries Limited,
Pomillo Limited and the Registrant relating to a $1,977,613 loan to Pomillo Limited.*
10.13 Agreement for the Sale and Purchase of Shares of Durable Electronics Industries Limited
dated as of November 1, 1997 between Durable Electrical Metal Factory Limited and Pomillo
Limited.*
10.14 Deed of Assignment dated as of November 1, 1997 among Durable Electronics Industries
Limited, Durable Electrical Metal Factory Limited and Pomillo Limited.*
10.15 Loan Agreement dated as of November 1, 1997 among Durable Electrical Metal Factory
Limited, Durable Electronics Industries Limited and the Registrant relating to a $6,219,512
loan to Durable Electronics Industries Limited*
10.16 Working Capital Loan Agreement dated as of November 1, 1997 among Durable Electrical
Metal Factory Limited, Durable Electronics Industries Limited and the Registrant relating to a
$500,000 loan to Durable Electronics Industries Limited.*
10.17 Purchase Agreement dated as of December 8, 1997 between BT Commercial Corporation and
the Registrant.*
10.18 Product Support Agreement dated October 1996 between VAC Service Corp. and the
Registrant.*
10.19 Lease Agreement, dated December 19, 1997 between H. Joel Rahn as lessor and the
Registrant as lessee.*
10.20 Tenancy Agreement dated November 19, 1997 between the Registrant and Lai Sun
Development Registrant Limited*
10.21 Aircraft Lease dated as of June 1, 1997 between the Registrant and F Fifty Holdings, Inc.*
10.22 Charge dated November 1, 1997 between Durable Electronics Industries Limited and Durable
Electrical Metal Factory Limited.*
10.23 Credit Agreement dated as of July 23, 1997 by and among the Registrant and Newtech (Hong
Kong) Limited, as Borrowers, and Bank Leumi Le-Israel B.M., Comerica Bank and National
Bank of Canada, as the Banks, and Bank Leumi Le-Israel B.M., as the Agent, as amended.*
10.24 Indemnification and Security Agreement dated as of September 18, 1997 of the Registrant in
favor of Windmere Durable-Holdings, Inc.*
10.25 Letter Agreement dated as of September 16, 1997 among Joel Newman, Windmere Durable-
Holdings, Inc. and the Registrant.*
10.26 Guaranty Agreement dated as of July 23, 1997 among Joel Newman and Bank Leumi Le-Israel
B.M., as Agent for the Banks named therein.*
10.27 Guaranty Agreement dated as of July 23, 1997 among Windmere Durable-Holdings, Inc. and
Bank Leumi Le-Israel B.M., as Agent for the Banks named therein, as amended.*
10.28 Promissory Note of the Registrant in the principal amount of $2,000,000 payable to Windmere
Holdings Corporation.*
10.29 Revolving Note of the Registrant in the principal amount of $3,091,352 payable to Windmere
Holdings Corporation.*
10.30 Promissory Note of the Registrant in the principal amount of $2,000,000 payable to Joel
Newman.*
10.31 Promissory Note of Windmere Holdings Corporation in the principal amount of $3,000,000
payable to the Registrant.*
10.32 Promissory Note of Windmere Holdings Corporation in the principal amount of $2,000,000
payable to the Registrant.*
10.33 Lease Agreement dated as of December 16, 1996 between Durable Electronics Industries
Limited and the Shenzhen Buji District Economic Development Company.*
10.34 Employment Agreement dated as of April 15, 1998 between the Registrant and Joel Newman.
10.35 Employment Agreement dated as of April 15, 1998 between the Registrant and Hatch Masuda.
10.36 Employment Agreement dated as of April 15, 1998 between the Registrant and Leonor
Schuck.
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- -------------------------------------------------------------------------------------------
<S> <C>
10.37 Registration Rights Agreement dated as of April 15, 1998 among the Registrant, Joel Newman
and Windmere Holdings Corporation.*
10.38 Amended and Restated Credit Agreement dated as of June 8, 1998 by and among the
Registrant, Newtech (Hong Kong) Limited, Newtech Electronics Industries Limited and
Durable Electronics Industries Limited, as Borrowers, the Lender parties thereto, National
Bank of Canada, as Agent and NationsBank, N.A., as Collateral Agent.*
21.1 List of subsidiaries of the Registrant.*
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Grant Thornton.
23.3 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. (included in its opinion
to be filed as Exhibit 5.1).**
24.1 Powers of Attorney of Directors and Executive Officers (included on the Signature Page of
this Registration Statement).
27 Financial Data Schedule.*
</TABLE>

- ----------------
* Previously filed.
** To be filed by amendment.
+ Certain provisions of this exhibit have been omitted and are subject to a
request for confidential treatment filed with the Securities and Exchange
Commission.

(b) The following financial statement schedules have been filed with this
Registration Statement:

<TABLE>
<S> <C>
Schedule II-Valuation and Qualifying Accounts ......... S-1
</TABLE>

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 14
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

(i) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Miami, State of Florida,
on this 27th of July, 1998.

NEWTECH ELECTRONICS INDUSTRIES, INC.

By: /s/ LEONOR SCHUCK
Leonor Schuck
Vice President, Finance and
Chief Financial Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------- ------------------------------- --------------
<S> <C> <C>
/s/ * Chairman, President and July 27, 1998
- ------------------------- Chief Executive officer
Joel Newman

/s/ LEONOR SCHUCK Vice President, Finance and July 27, 1998
- ------------------------- Chief Financial Officer
Leonor Schuck (principal accounting officer)

/s/ * Director July 27, 1998
- -------------------------
Noel Shapiro

/s/ * Director July 27, 1998
- -------------------------
David M. Friedson

/s/ * Director July 27, 1998
- -------------------------
Arnold Thaler
</TABLE>

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

*By: /s/ LEONOR SCHUCK
------------------------------
Leonor Schuck
Attorney-in-fact

II-5
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
Newtech Electronics Industries, Inc.

We have audited the consolidated financial statements of Newtech
Electronics Industries, Inc. and subsidiaries as of December 31, 1996 and 1997,
and for each of the three years in the period ended December 31, 1997, and have
issued our report thereon dated April 3, 1998 (included elsewhere in this
Registration Statement). Our audits also included the financial schedule listed
in Item 16(b) of this Registration Statement. This schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

Miami, Florida
April 3, 1998 /s/ ERNST & YOUNG LLP

S-1
<PAGE>

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
NEWTECH ELECTRONICS INDUSTRIES, INC. AND SUBSIDIARIES
DECEMBER 31, 1997

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS YEAR
- ------------------------------------------------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Deducted from asset accounts:
Allowance for doubtful accounts .................... $ 71,513 $ 54,119 $ 103,932 $ 21,700
-------- ---------- ---------- ---------
YEAR ENDED DECEMBER 31, 1996
Deducted from asset accounts:
Allowance for doubtful accounts .................... $ 21,700 $ 85,348 $ 34,048 $ 73,000
-------- ---------- ---------- ---------
YEAR ENDED DECEMBER 31, 1997
Deducted from asset accounts:
Allowance for doubtful accounts .................... $ 73,000 $ 160,102 $ 83,102 $ 150,000
-------- ---------- ---------- ---------
Allowance for warranty and product returns ......... $ 0 $2,004,185 $1,538,395 $ 465,790
-------- ---------- ---------- ---------
THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
Deducted from asset accounts:
Allowance for doubtful accounts .................... $150,000 $ 35,718 $ -- $ 185,718
-------- ---------- ---------- ---------
Allowance for warranty and product returns ......... $465,790 $1,027,000 $1,197,790 $ 295,000
-------- ---------- ---------- ---------
</TABLE>

- ----------------
Note: At December 31, 1996 and 1995 and for the years then ended, there were no
allowance deductions from asset accounts for warranty and product
returns.

S-2
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- --------------------------------------------------------------------------- -------------
<S> <C> <C>
4.2 Form of Registrant's Common Stock Certificate.
10.4 Trademark License Agreement dated as of May 1, 1996 between the Registrant
and White Consolidated Industries, Inc., as amended.
10.5 Trademark License Agreement dated as of September 15, 1997 between the
Registrant and White Consolidated Industries, Inc., as amended.
10.6 Trademark License Agreement dated as of September 15, 1997 between the
Registrant and White Consolidated Industries, Inc., as amended.
10.34 Employment Agreement dated as of April 15, 1998 between the Registrant and
Joel Newman.
10.35 Employment Agreement dated as of April 15, 1998 between the Registrant and
Hatch Masuda.
10.36 Employment Agreement dated as of April 15, 1998 between the Registrant and
Leonor Schuck.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Grant Thornton.
</TABLE>

NTC [LOGO]

<TABLE>
<S> <C> <C>
INCORPORATED UNDER THE LAWS OF NEWTECH ELECTRONICS INDUSTRIES, INC. SEE REVERSE FOR
THE STATE OF FLORIDA CERTAIN DEFINITIONS
CUSIP 652520 10 7
</TABLE>

This Certifies that

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $.01 PAR VALUE PER
SHARE, OF

NEWTECH ELECTRONICS INDUSTRIES, INC.

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued in
accordance with and shall be held subject to all of the provisions of the
Articles of Incorporation and By-Laws of the Corporation, each as from time to
time amended, copies of which are on file with the Transfer Agent, to all of
which the holder by acceptance hereof assents. This certificate is not valid
until countersigned and registered by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

Dated:

ASSISTANT SECRETARY AND PRESIDENT, CHAIRMAN AND
CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:

AMERICAN STOCK TRANSFER & TRUST COMPANY
TRANSFER AGENT AND REGISTRAR

AUTHORIZED SIGNATURE

<PAGE>

NEWTECH ELECTRONICS INDUSTRIES, INC.

The Corporation will furnish without charge to each shareholder who so
requests the designations, relative rights, preferences and limitations
applicable to each class of shares and the variation in rights, preferences and
limitations determined for each series within a class (and the authority of the
Board of Directors to determine variations for future series).

The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common

UNIF GIFT MIN ACT--......................Custodian......................
(Cust) (Minor)

under Uniform Gifts to Minors
Act........................

(State)

For value received ______________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________

______________________________________

________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF
ASSIGNEE)
________________________________________________________________________________

________________________________________________________________________________

_____________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
_______________________________________________________________________Attorney
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.

Dated _____________________________

_____________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED:________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

EXHIBIT 10.4

TRADEMARK LICENSE AGREEMENT

AGREEMENT entered into as of May 1, 1996, by and between White Consolidated
Industries, Inc., a Delaware Corporation, having its principal office at 11770
Berea Road, Cleveland, Ohio 44111 ("Licensor"), and Newtech, Inc., a Florida
Corporation, having its principal office at 16550 N.W. 10th Avenue, Miami,
Florida 33169 (hereinafter referred to as "Licensee").

WHEREAS, Licensor is the owner of the trademark White-Westinghouse and
associated designs and trade dress, (together, the "Trademark"), and is using
the Trademark throughout the World, and

WHEREAS, Licensor has the right to grant Licensee the license, right and
permission to use the Trademark, and

WHEREAS, Licensee is in the business of manufacturing, distributing and selling
articles described and specified hereinafter (the "Products"), and desires to
secure the license, right and permission to use the Trademark upon, and in
connection with, the manufacturing, distributing and selling of such Products;,
and

WHEREAS, the Products that are the subject of this Agreement have been defined
by the parties as consumer audio and video products and telephones and related
products listed on Exhibit A hereto (and any other articles which the parties
mutually agree to be subject to the provisions of this Agreement which, in
accordance with the terms of this Agreement, bear the Trademark (collectively,
the "Trademarked Product").

WHEREAS, Licensor desires to grant to Licensee, and Licensee desires to accept
from Licensor, a license to use the Trademark in the design, manufacture,
advertising, sale and promotion of the Products, subject to each of the terms,
provisions and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
convenants and provisions contained herein, the parties hereto do hereby agree
as follows:

<PAGE>

Page 2--

ARTICLE 1
GRANT OF LICENSE AND DESIGNATION OF TRADEMARKED PRODUCT

Effective upon the execution of this Agreement, Licensor hereby grants to
Licensee, for the period hereinafter specified and upon the terms, provisions
and conditions of this Agreement, the exclusive right and license to use the
Trademark within the geographic area described in Article 2 hereof, in the
design, manufacture, advertising, sale and promotion of the Trademarked Product.
Licensor recognizes that Licensee's affiliate Newtech(HK), Ltd., a Hong Kong
corporation having its principal offices located at Room 909, Holywood Plaza,
610 Nathan Road, Kowloon, Hong Kong, may from time to time ship Trademarked
Product directly to Licensee's customers.

In the event of any disputes between the parties to this Agreement regarding the
definition of Trademarked Product, the final decision regarding such definition
shall rest in Licensor's sole and absolute discretion. The rights granted to
Licensee herein are limited to use on or in connection with the Trademarked
Product and Licensee specifically agrees not to use the Trademark in any manner
or on any product, service or item, except as set forth in the Agreement.

ARTICLE 2
GEOGRAPHIC AREA

The rights granted to Licensee hereunder may be exercised by Licensee within the
USA and Canada (the ''Territory''), and Licensee shall have exclusive rights
with respect to the Trademarked Product. Upon Licensee's request, Licensor may,
in its discretion, extend the areas in which Licensee may exercise said rights,
but any such extension shall, in each instance, be evidenced by a written and
duly executed amendment to this Agreement for such periods and upon such terms
and conditions as shall be determined by Licensor. From time to time Licensor
may wish to purchase Trademarked Product for sale outside the Territory.
Licensee agrees to sell Trademarked Product to Licensor at the same price
Licensee sells Trademarked Product to its best customer.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LICENSOR

3.1 Organization and Power. Licensor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Licensor
has all corporate power and authority to execute and deliver this Agreement and
perform its obligations hereunder.

<PAGE>

Page 3--

3.2 AUTHORIZATION. The execution, delivery and performance by Licensor of this
Agreement and the consummation of the transaction contemplated hereby has been
duly and validly authorized by all requisite corporate action, and no other
corporate act or proceeding on this part of Licensor is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby.

3.3 NO VIOLATION. Licensor is not subject to nor obligated under its certificate
of incorporation or bylaws, any applicable law, rule or regulation of any
governmental authority, or any agreement, instrument, license or permit, or
subject to any order, writ, injunction or decree, which would be breached or
violated by its execution, delivery or performance of this Agreement.

3.4 OWNERSHIP OF TRADEMARK. Licensor is the owner of the Trademark and, to
Licensor's knowledge, the use of the Trademark in the design, manufacture,
advertising, sale and promotion of any of the Trademarked Product will not
infringe any intellectual property or any other rights of any third party.

3.5 RIGHT TO GRANT LICENSE. Licensor has the full right, power and authority to
grant the license as set forth in Article 1 hereof.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LICENSEE

4.2 AUTHORIZATION. The execution, delivery and performance by Licensee of this
Agreement and the consummation of the transaction contemplated hereby has been
duly and validly authorized by all requisite corporate action, and no other
corporate act or proceeding on this part of Licensee is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby.

4.3 NO VIOLATION. Licensee is not subject to nor obligated under its certificate
of incorporation or bylaws, any applicable law, rule or regulation of any
governmental authority, or any agreement, instrument, license or permit, or
subject to any order, writ, injunction or decree, which would be breached or
violated by its execution, delivery or performance of this Agreement.
<PAGE>

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ARTICLE 5
TERM OF AGREEMENT

5.1 CONTRACT TERM. The Contract Term of this Agreement commence of the date
first mentioned above and ending on December 31, 1998 at midnight Eastern
Standard Time, unless sooner terminated pursuant to the terms of this Agreement.

5.2 EXTENSION TERMS. Licensor hereby grants to Licensee the option to extend the
term of this Agreement for up to fourteen (14) one (1) year periods commencing
as of January 1, 1999 and ending on December 31, 2012, at midnight Eastern
Standard Time, unless sooner terminated pursuant to the terms of this Agreement
with such extended terms to be subject to the same terms and must achieve
specified levels of Minimum Sales during the then preceding Contract or
Extension Term of this Agreement as set forth in Article 8 hereof. Such options
to extend the term of this Agreement must be exercised by Licensee, if at all,
by giving written notice to Licensor at least one hundred and twenty (120) days
prior to the expiration of the then preceding Contract Term of this Agreement.
Nine months (270 days) prior to the end of the fourteenth extension, the parties
will negotiate, in good faith, the possibility of extending this Agreement for
one or more extension periods. Either party may terminate this Agreement without
cause, provided however, that such termination shall not be permitted within the
first 5 (five) years following the Effective Date of this Agreement. Notice of
termination must be given in writing to the other Party hereto 1 (one) year
prior to the termination date. Licensee shall have the right to sell off
inventory of Trademarked Product in accordance with Article 21. Neither Licensor
nor Licensee shall be liable for any compensation or damages by reason of such
early termination.

ARTICLE 6
ROYALTIES

6.1 EARNED ROYALTIES. Subject to of Article 7 hereof, Licensee shall pay to
Licensor for the rights granted hereunder a sum equal to the following
percentage of the Net Invoice Value of Trademarked Products Sold by Licensee
(the "Royalties").:

Audio & Telephone Products: [*****]
Video Products: [*****]

The Royalties shall be remitted in accordance with Section 7.4 of this
Agreement.

6.2 DEFINITION OF NET INVOICE VALUE. As used throughout this Agreement, the term
"Net Invoice Value" shall mean the aggregate of the invoiced amounts of
Trademarked Product sold by Licensee, less (a) returned goods, refunds, credits
and allowances actually made or allowed to customer with respect to Trademarked
Product, (b) freight or handling charges charged to customers or incurred on
returned goods, and (c) sales and excise taxes actually paid ("NIV").

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>
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ARTICLE 7
MINIMUM ROYALTY PAYMENTS

7.1 MINIMUM ROYALTY PAYMENTS. The Minimum Royalties for the Contract Term shall
be paid two hundred fifty thousand dollars ($250,000) in advance on execution of
this Agreement and the balance in four (4) equal installments of $51,250 each by
the 30th day of March, June, September and December 1998. The Minimum Royalties
for each Extension Term as shown below shall be paid in four (4) equal
installments each by the 30th day of March, June, September and December of the
respective term.

Term Year(s) Minimum
Contract Royalties
Term 1997/1998 $ 455,000

First Extension Term 1999 525,000
Second Extension Term 2000 620,000
Third Extension Term 2001 763,000
Fourth Extension Term 2002 945,000
Fifth Extension Term 2003 998,000
Sixth Extension Term 2004 1,057,000
Seventh Extension Term 2005 1,113,000
Eighth Extension Term 2006 1,173,000
Ninth Extension Term 2007 1,232,000
Tenth Extension Term 2008 1,288,000
Eleventh Extension Term 2009 1,348,000
Twelfth Extension Term 2010 1,407,000
Thirteenth Extension Term 2011 1,467,000
Fourteenth Extension Term 2012 1,526,000

7.2 INITIAL ROYALTY PAYMENT. Licensee shall pay Licensor an initial royalty
payment (the "initial Royalty Payment") of [*****] upon execution of this
Agreement. The Initial Royalty Payment shall be applied against the first
Royalties payable pursuant to Section 7.4 of this Agreement.

7.3 APPLICATION OF EARNED ROYALTIES. The Earned Royalties to be paid under
Article 6 shall be applied against the Minimum Royalties due under this Article
7, and Licensee shall pay by each due date specified in this Article 7 the sum
of: (i) the Minimum Royalties as specified above; plus (ii) the excess, if any,
of the Earned Royalties (per Article 6) over the Minimum Royalties for the then
current quarter payable by such due date (such sum hereinafter referred to as
the "Royalty Payment").

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>
Page 6--

7.4 QUARTERLY REPORTS OF SALES AND ROYALTY PAYMENTS. On or before the twentieth
(20th) day of each January, April, July and October during the Contract Term and
any Extension Term, Licensee shall deliver to Licensor the following: (i) a
written statement, certified to be true and correct by the Chief Financial
Officer of Licensee, setting forth the Gross an NIV sales for each Trademarked
Product during the preceding calendar quarter and a calculation of the Royalties
payable under Article 6 and 7 of this Agreement for such period, and (ii) a
check payable to Licensor in full payment of the amount due under Article 6 and
7 of this Agreement for such period. Each royalty payment, payable in US
currency, shall be remitted by check at Licensor's address as provide by this
Agreement.

ARTICLE 8
MINIMUM SALES OF TRADEMARKED PRODUCT

8.1 FAILURE TO MEET REQUIRED MINIMUM SALES. Licensee shall use its best efforts
to advertise and sell Trademarked Product in the Territory during the term of
this Agreement. Should Licensee fail to achieve the NIV sales over any two
consecutive terms as set forth below in this Article 8 then Licensor may, at its
option, elect to terminate this Agreement by written notice delivered to
Licensee with sixty (60) days after the end of any period in which Licensee
failed to achieve such required Minimum Sales. Such termination shall be
effective upon delivery of said notice but shall not affect Licensee's
outstanding indebtedness to Licensor or any of the provisions relating thereto.

Contract Term [*****]
First Extension Term [*****]
Second Extension Term [*****]
Third Extension Term [*****]
Fourth Extension Term [*****]
Fifth Extension Term [*****]
Sixth Extension Term [*****]
Seventh Extension Term [*****]
Eight Extension Term [*****]
Ninth Extension Term [*****]
Tenth Extension Term [*****]
Eleventh Extension Term [*****]
Twelfth Extension Term [*****]
Thirteenth Extension Term [*****]
Fourteenth Extension Term [*****]

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>
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ARTICLE 9
ADVERTISING AND ART WORK

9.1 ADVANCE SUBMISSION. Licensee shall submit to Licensor for approval all
advertising and promotional items, budgets, programs and materials relating to
the Trademarked Product at least fourteen (14) days prior to intended usage.
Licensor shall provide Licensee with written approval or disapproval within ten
(10) business days after Licensor's receipt thereof. Should Licensor disapprove,
its written notice shall explain in detail the reasons for disapproval so that
Licensee may prepare and submit new advertising and art work.

9.2 ART WORK. Licensor shall make available to Licensee any and all necessary
film, photostats, artwork and full color reproductions of its Trademark,
artwork, designs and other materials necessary for Licensee's use in accordance
with this Agreement.

9.3 EXPENSE REIMBURSEMENT. Licensee shall reimburse Licensor for Licensor's
out-of- pocket expenses, including, reasonable hourly charges for creative
personnel incurred by Licensor in the preparation for Licensee, when and if
required, of new artwork, mechanicals, and film. All charges shall be agreed to
prior to the time such expenses are incurred, and all sums due to Licensor under
this Article 9 shall paid by Licensee upon receipt of an appropriate invoice.

ARTICLE 10
LICENSEE'S RECORDS

Licensee shall keep and maintain at its regular place of business separate and
complete books and records of all business transacted by Licensee in connection
with the Trademarked Product, including, but not limited to, books and records
relating to Gross and NIV of Sales and orders for Trademarked Product. Such
books and records shall be maintained in accordance with generally accepted
accounting procedures and principles consistently applied. Licensor or its duly
authorized agents or representatives shall have the right to inspect said books
and records at Licensee's premises during Licensee's regular business hours.
<PAGE>
Page 8--

ARTICLE 11
LICENSEE'S ANNUAL REPORTS AND ANNUAL ROYALTY PAYMENTS

On or before the fifteenth (15th) day of the second (2nd) month following the
end of Licensee's fiscal year, Licensee shall render to Licensor a statement
certified by Licensee's Chief Financial Officer disclosing gross and NIV Value
of sales, Royalties due and Royalties paid for Licensee's preceding fiscal year,
and for any Contract or Extension Term which ended within said fiscal year. If
said statement discloses that the amount of Royalties paid during any period to
which said statement relates was less than the amount required to be paid under
the provisions of this Agreement, Licensee shall pay said deficiency concurrent
with the delivery of the statement. If said statement discloses the Licensee has
paid Royalties in excess of the amounts required to be paid, Licensor shall
apply said excess to the next Royalty payment.

ARTICLE 12
AUDIT BY LICENSOR

At all times during the existence of this Agreement and for twelve (12) months
after the last report is rendered hereunder, Licensor, if it so chooses, may
cause its independent accountants to audit all books and records of Licensee
pertaining Trademark Product. Licensor shall have the further right to engage an
independent certified public accounting firm, to audit the books and records of
Licensee with regards to the Royalties due hereunder. In the event any such
audit shall disclose that the Licensee has understated NIV Sales or underpaid
Royalties for any reporting period, Licensee shall forthwith and upon written
demand of Licensor, pay the amount, if any, by which the Royalties owing exceed
Royalties paid, plus interest of twelve percent (12%) per annum on such
delinquent amounts, accruing from the date on which such amounts became
delinquent to the date on which such delinquent amounts were paid. In the event
that Licensee has understated NIV Sales and consequently has underpaid Royalties
in excess of One Thousand dollars ($1,000) of amount due for any Contract Term,
Licensee shall forthwith and upon written demand also pay ail costs, fees and
expenses incurred by Licensor in conducting such audit, including, without
limitation, reasonable travel expenses. Should such audit disclose that the
Royalties paid exceed the Royalties due, any excess revealed by such audit will
be remitted to Licensee.
<PAGE>
Page 9

ARTICLE 13
LICENSEE OBLIGATIONS

13.1 LICENSEE DILIGENCE. Licensee shall design, manufacture, advertise, sell and
ship the Trademarked Product and shall continuously and diligently during the
term hereof procure and maintain facilities and trained personnel sufficient and
adequate to accomplish the foregoing, all to the extent and in a manner no less
thorough, diligent and professional than the same accorded by Licensee for
Licensee's most favored premium products and/or services. A cessation of the
above for a continuous period of ninety (90) days shall be grounds for
termination by Licensor, without notice. The marketing of Trademarked Product
shall be conducted in a manner consistent with enhancing the long-term value of
the Trademark. It is the interest of the parties that Trademarked Product be
sold simultaneously through a wide range of retailers. Accordingly, Licensee
shall continuously and diligently design, price and promote Trademarked Product
to retailers in all major classes of trade including department stores (i.e.,
Macy's, Burdine's, Bloomingidale's, etc.), mass merchants (i.e., Walmart, Kmart,
etc.), regional discounters (i.e., Caldor, Bradlees, etc.), warehouse clubs
(i.e., Target, Sam's, etc.), specialty electronics chains (i.e., The Wiz, etc.),
mail order, premium and television shopping services. Licensee shall exhibit
Trademarked Product in exhibit or booth space at the annual electronics show.

13.2 LICENSOR INSPECTION RIGHTS. Licensor shall have the right to inspect any of
Licensee's facilities pertaining to the Trademarked Product during regular
business hours. Licensor shall conduct such inspection in the presence of an
officer, partner or authorized representative of Licensee.

13.3 NO COMPETITION WITH TRADEMARKED PRODUCT. During the term of this Agreement,
Licensee shall not enter another license Agreement for products that would
directly compete with the Trademarked Product.

13.4 FORFEITURE OF CATEGORIES OF TRADEMARK PRODUCT FOR NON-USE. Licensee's
failure to introduce for sale, by the commencement of the First Extension term,
Trademarked Product in any of the eleven (11) categories listed on Exhibit A
shall be deemed a forfeiture of its grant to use the Trademark in that
category(ies) of Trademarked Product. Failure of Licensee to ship Trademarked
Product in any of eleven categories of Trademarked Product for a period of one
(1) year shall be deemed a forfeiture of its grant to use the Trademark in those
categories of Trademark Product.
<PAGE>
Page 10--

13.5 FINANCIAL STANDARDS. Licensee shall provide its financial statements to
Licensor annually or as requested by Licensor, which are to be prepared in
accordance with U.S. GAAP. Licensee must promptly notify Licensor of a
termination of any significant line of credit or guarantee of indebtedness by
personal guarantor. Should Licensee's net worth fall below $2,000,000 in the
aggregate, Licensor may at its option terminate this Agreement. Likewise
Licensor may terminate this Agreement immediately if any of the following events
occur:

1) Licensee is in default under the provisions of any line of credit or
debt agreement with financing institution.

2) A sale or transfer of Licensee's assets which, in Licensor's opinion,
may affect the ability of Licensee to operate the business pursuant to
this Agreement, or

3) Licensee incurs net operating losses in the aggregate for three or more
consecutive years.

ARTICLE 14
APPROVALS AND QUALITY STANDARDS

14.1 ADVANCE APPROVAL. Prior to any use of any Trademark, Licensee shall, at
Licensee's expense, submit to Licensor, for Licensor's written approval, the
following: (a) two (2) specimens of each Product on which the Trademark is to
appear (the "Specimens"); (b) all artwork which Licensee intends to use in
connection with the Trademark; and (c) all packaging, advertising and
promotional literature which Licensee intends to use in the marketing or
merchandising of the Trademarked Product. Licensor shall give Licensee written
notice of approval or disapproval within ten (10) business days from its receipt
of the Specimens, and should Licensor disapprove, its written notice shall
explain in detail the reasons for disapproval so that Licensee may prepare and
submit new Specimens and/or samples.

14.2 STANDARDS. After Licensor has given its written approval of said Specimens,
then the approved product, quality, packaging, advertising and promotional
literature shall be the standard for all Trademarked Product produced thereafter
(the "Approved Quality").

14.3 PERIODIC SAMPLES. Thereafter, consecutively at four (4) month intervals,
Licensee shall, at Licensee's expense, submit to Licensor not less than two (2)
randomly selected production run samples of the Trademarked Product.

14.4 APPROVED QUALITY STANDARDS. Without the prior written approval of Licensor,
Licensee shall not sell or distribute any Trademarked Product which deviates
from the Approved
<PAGE>
Page 11--

Quality more than the deviation which would occur as a result of normal
deviations in raw material characteristics.

14.5 PRODUCT SERVICING AND REPAIRS. Licensee will propose, prior to the sale of
Trademarked Product at retail, a mechanism by which Licensee will respond to
inquiries from consumers and third party appliance repair vendors regarding the
operation of Trademarked Product and the procedures for obtaining parts for, or
repairs to, Trademarked Product, which mechanism shall be designed to minimize
any confusion with Licensor's existing customer service operations, or the
existing customer service operation of other Licensees of the Trademark.

14.6 PERIODIC REVIEW MEETINGS. Licensee will conduct periodic meetings with
Licensor to review Licensee's progress and performance under the terms of this
Agreement.

ARTICLE 15
RESTRICTIONS UPON SUBCONTRACTS

Licensee is responsible for the work of any subcontractor and for any debts,
obligations or liabilities incurred by any such subcontractor in connection with
the Trademarked Product. Licensee shall discontinue using any subcontractor who
shall fail to comply with the Approved Quality standards and/or delivery
schedules required by Licensee or Licensor.

ARTICLE 16
ASSIGNMENT; TRANSFERS; SUBLICENSE

The parties hereby acknowledge the substantial personal service nature of
Licensee's obligations hereunder. Therefore, without the prior written consent
of Licensor, which consent will not be unreasonably be withheld, Licensee shall
not voluntarily or by operation of law assign or transfer this Agreement or any
of Licensee's rights or duties hereunder or any interest of Licensee herein, nor
shall Licensee enter into any sublicense for the use of the Trademark by others.
Any assignment, transfer or sub-license without Licensor's written consent shall
be void and at the option of the Licensor shall constitute a default hereunder.
For purposes of this Article 16, the failure of Windmere Corporation, a Florida
Corporation, having its principal offices at 5980 Miami Lakes Drive, Miami
Lakes, Florida, 33014, and Joel Newman, President of Newtech (Licensee) to
maintain ownership of at least 51% of the outstanding voting stock of Licensee
shall be deemed an attempted assignment of this Agreement, unless Licensee has
made a public offering of its voting stock in which case Newtech and Windmere
need not retain 51% of the voting stock.

<PAGE>

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ARTICLE 17
NO DILUTION OF TRADEMARK OR ATTACK UPON TRADEMARK

17.1 LIMIT ON USE. Licensee shall not at any time use, promote, advertise,
display or otherwise publish any Trademark or any material utilizing or
reproducing any Trademark in whole or in part, except as specifically provided
in this Agreement, without the prior written consent of Licensor, which consent
shall not be unreasonably withheld.

17.2 NOTICE. Licensee shall cause to appear on all Trademarked Product and on
all materials on, or in connection with which any Trademark is used, such
legends, markings and notices as may be required by law to give appropriate
notice of all Trademark, trade name or other rights therein or pertaining
thereto.

17.3 MATERIALS AND DOCUMENTS. Licensee shall provide all materials and execute
all documents required by law incident to the maintenance and/or preservation of
the Trademark and Licensor's rights therein.

17.4 NO CONTEST OF TRADEMARK VALIDITY. Licensee shall not contest the validity
of the Trademark or any rights of Licensor therein, nor shall Licensee willingly
become an adverse party in litigation in which others shall contest the
Trademark or Licensor's said rights. In addition thereto, Licensee shall not in
any way seek to avoid its obligations hereunder because of the assertion or
allegation by any persons, entities or government agencies, bureaus, or
instrumentalities that any Trademark is invalid or ineffective or by reason of
any contest concerning the rights of Licensor therein.

17.5 NO OTHER TRADEMARK PROTECTION. Licensee agrees not to seek any state,
Federal, foreign or other statutory trademark or service mark or other
protection for the Trademark as they are used in connection with the Licensee's
goods or services and all use of the Trademark shall be for the sole benefit of
the Licensor.

ARTICLE 18
INFRINGEMENT AND OTHER TRADEMARK LITIGATION

18.1 TRADEMARK DEFENSE. Licensee shall apprise Licensor immediately upon
discovery of any possible infringement of the Trademark which comes to the
attention of the Licensee. Licensor, at its sole cost and expense, and in its
own name, may prosecute and defend any action or proceeding which Licensor deems
necessary or desirable to protect the Trademark, including but not limited to
actions or proceedings involving their infringement. Upon written request by
Licensor, Licensee shall join Licensor at Licensor's sole expense in any such
action or proceeding. However, Licensee shall not commence any action or
<PAGE>
Page 13--

proceeding to protect the Trademark or any action or proceeding alleging
infringement thereof without the prior written consent of Licensor. Licensee may
prosecute and defend, at its sole expense and in its own name, any action or
proceeding to protect its designs or styles. Any and all damages recovered in
any action or proceeding commenced by Licensor shall belong solely and
exclusively to Licensor.

18.2 NO LIABILITY FOR VIOLATION. Licensor shall have no liability to Licensee or
any other person, nor shall be there by any right of contribution against
Licensor therefore, for any action or proceeding alleging any violation of any
antitrust, trade regulation, or similar statute, or for unfair competition.
Furthermore, in the event of any threatened or actual action or proceeding in
which Licensee and Licensor are or may be charged with jointly violating any
antitrust, trade regulation or similar statute, or any law pertaining to unfair
competition, Licensee may, at its option, elect to be represented in such
threatened or actual action or proceeding by Licensor's counsel at no cost to
Licensee for fees, costs or expenses. Should Licensee elect in such event to be
represented by Licensor's counsel, then Licensee shall relinquish any right to
control or direct such threatened or actual action or proceeding, and Licensor
shall maintain full control thereof. Such representation of Licensee shall
continue only so long as Licensor's counsel, in its sole and absolute
discretion, believes that it may properly and ethically represent both Licensor
and Licensee. In the event that Licensor's counsel decides that it may no longer
properly and ethically represent both Licensor and Licensee, then Licensor's
counsel shall continue to represent Licensor only, and Licensee's continued
defense shall be at Licensee's sole expense and shall be conducted by separate
counsel.

ARTICLE 19
ADDITIONAL RESTRICTIONS UPON USE OF TRADEMARK

19.1 IDENTIFICATION OF TRADEMARKED PRODUCT. It is the intention of the parties
hereto and the purpose of this Article 19 that all of the Trademark Product be
identified to the general public by the Trademark. Licensee shall use a
registration indicator in the form of a circled-R or "TM" symbol in conjunction
with the Trademark when so instructed by the Licensor. Licensee further agrees
to assist Licensor in obtaining registrations for the Trademark in the event any
Trademark is not yet registered for the Trademark Product. Licensee shall use
notice language in the manufacture, sale, advertising or other promotion of the
Trademarked Product as follows: "White-Westinghouse is a registered Trademark of
White Consolidated Industries, Inc. and is used under license." or other such
language as Licensor designates in writing.
<PAGE>

Page 14--

ARTICLE 20
DEFAULTS BY LICENSEE

20.1 DEFAULTS. Except as otherwise expressly provided in this Agreement, in the
event Licensee shall default in the performance of any of the terms, conditions
or obligations to be performed by Licensee hereunder, and if such default
involves the payment of money and same shall not be cured within ten (10) days
after Licensor gives written notice to Licensee of such default, or if such
default involves performance other than the payment of money and the same is not
cured within fifteen (15) days after Licensor gives written notice to Licensee
of such default, then and in any such event, Licensor may immediately and
without prior notice terminate this Agreement and all of the rights and
obligations hereunder (except as otherwise expressly provided by this
Agreement). In the event that a Receiver is appointed to, or one or more
creditors take possession of all, or substantially all, of the assets of the
Licensee, or if Licensee shall make a general assignment for the benefit of
creditors, or if any action is taken or suffered by Licensee under any state or
Federal insolvency or bankruptcy act, then this Agreement and all of the rights
and obligations hereunder (except as otherwise expressly provided by this
Agreement) shall immediately, and without notice or need of any further action
by any party hereto, terminate.

20.2 TIME FOR PERFORMANCE. The time for performance of any act required of
either party shall be extended by a period equal to the period during which such
party was reasonably prevented from performance by fire, flood, storm, or other
like casualty beyond such party's control.

ARTICLE 21
LICENSOR'S RIGHTS TO DESIGNS, ETC., UPON TERMINATION

21.1 RIGHTS UPON TERMINATION. In the event this Agreement is terminated for any
reason, or expires according to its terms, Licensee shall assign, transfer and
transmit to Licensor any and ail rights of Licensee in the Trademark, including
associated goodwill, and shall not thereafter manufacture, sell or use the
Trademark in any manner; provided that, Licensee may however, dispose of its
stock of Trademarked Product on hand within [*****] after the termination of
this Agreement; provided, however, all sums due to Licensor have first been
paid; and, further provided, that Licensee shall, prior to the effective date of
said termination, deliver to Licensor a detailed schedule of all inventory of
Trademarked Product in Licensee's possession (constructive or otherwise). After
the expiration of the aforesaid [*****] period, Licensee shall destroy all
Trademarked Product and packaging and promotional material remaining in
Licensee's possession which are identified in any manner by or with the
Trademark. Notwithstanding the above, Licensor shall have the right to purchase
such excess stock of Trademarked Product, in whole or in part, prior to any sale
or offer

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 15--

of sale by Licensee to any third party, for an amount equal to the wholesale
cost of such Trademarked Product. It is specifically understood and agreed that
the Licensee's right to dispose of stock shall be conditioned upon the absence
of harm to the Trademark and/or the reputation of the Licensor arising from the
Licensee's use of the Trademark, as determined by the Licensor in its sole
discretion.

21.2 CONTINUATION OF AGREEMENT TERMS. Licensee shall continue to abide by the
terms of this Agreement with respect to such Trademarked Product during the
period in which disposition pursuant to Article 21.1 of this Agreement is taking
place. Neither Licensee nor any creditor (judgment or otherwise), assignee,
transferee, trustee, or receiver of Licensee, or similar person or officer, or
purchaser other than in the regular course of Licensee's business may sell or
transfer any Trademark Product until and unless all sums due Licensor from
Licensee have been paid. Further, upon termination of this Agreement, all
labels, signs, packages, wrappers, cartons, circulars, advertisements, and other
items bearing or containing any reproduction or representation of any of the
Trademark shall automatically and without cost to Licensor become the property
of Licensor, and Licensee shall immediately deliver the same to Licensor's place
of business or other location designated by Licensor. The reasonable cost of
such delivery shall be paid by the Licensor.

21.3 LICENSEE'S OBLIGATIONS. The termination of this Agreement for any reason
shall not relieve Licensee of any accrued obligations to Licensor nor shall such
action relieve Licensee of any obligation or duty which accrued on or after the
termination or expiration of this Agreement.

21.4 NO RIGHT IN LICENSEE. Except for the right to use the Trademark as
specifically provided for in this Agreement, (i) Licensee shall have no right,
title or interest in or to the Trademark, and (ii) upon and after the
termination of this Agreement, all rights granted to Licensee hereunder,
together with any interest in and to the Trademark that Licensee may acquire,
shall forthwith and without further act or instrument be assigned to and revert
to the Licensor. In addition, Licensee shall execute any instruments requested
by Licensor to accomplish or confirm the foregoing. Any such assignment,
transfer or conveyance shall be without consideration other than the mutual
agreements contained herein.

21.5 SURVIVAL OF TERMS. The provisions of this Article 21 shall survive the
termination (or expiration) of this Agreement.
<PAGE>

Page 16--

ARTICLE 22
ADDITIONAL RIGHTS PRIOR TO TERMINATION

During the final Contract Year of the Term hereof, Licensor shall have the right
to design and manufacture merchandise of the types covered by this Agreement and
to negotiate and conclude such Agreements as it desires pursuant to which it may
grant licenses to any party or parties of any or all of the rights herein
granted to Licensee; provided, however, that no merchandise herein identified as
Trademark Product shall be shipped by Licensor or any third party other than
Licensee prior to the expiration or termination of this Agreement (exclusive of
the additional [*****] period for the disposition of the Trademark Product as
provided in Article 21 hereof).

ARTICLE 23
GOODWILL

Licensee acknowledges and recognizes that the Trademark are of substantial
significance and value to Licensor and that said Trademark have acquired
valuable secondary meaning, value and goodwill. Except as may be otherwise
specified in this Agreement, Licensee shall not use any of the Trademark or any
name or symbol similar thereto as part of its name or symbol or as part of the
name or symbol of any corporation, partnership, joint venture, proprietorship or
other entity or person which it controls or with which it is affiliated.

ARTICLE 24
INSURANCE

Licensee shall at all times carry product liability insurance with respect to
the Trademarked Product with a limit of liability of not less than $[*****] and
Licensor shall be named therein as coinsured as its interests may appear. Such
insurance may be obtained in connection with a policy of product liability
insurance which covers products other than the Trademarked Product and shall
provide for at least thirty (30) days prior written notice to Licensor of the
cancellation or substantial modification thereof. Licensee shall deliver to
Licensor a certificate evidencing the existence of such insurance policies
promptly after their issuance.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 17--

ARTICLE 25
AGENTS, FINDERS AND BROKERS

Each of the parties to this Agreement shall be responsible for the payment of
any and all agent, brokerage and/or finder commissions, fees and related
expenses incurred by it in connection with this Agreement or the transactions
contemplated hereby and shall indemnify the other and hold it harmless from any
and all liability (including, without limitation, reasonable attorney's fees and
disbursements paid or incurred in connection with any such liability) for any
agent, brokerage and/or finder commissions, fees and related expenses claimed by
its agent, broker or finder, if any, in connection with this Agreement or the
transactions contemplated hereby. Licensor's sole agent/finder/broker in
connection with this Agreement is Leveraged Marketing Corporation of America
("LMCA") with offices at 156 West 56th Street, New York, New York 10019. Any and
all commissions, fees and/or other monies due LMCA in connection with this
Agreement shall be borne exclusively by Licensor as per the Agency Agreement of
March 1, 1995.

ARTICLE 26
RESERVED RIGHTS

Rights not herein specifically granted to Licensee are reserved by Licensor and
may be used by Licensor without limitation. Any use by Licensor of such reserved
rights, including but not limited to the use or authorization of the use of any
Trademark in any manner whatsoever not inconsistent with Licensee's right
hereunder, shall not be deemed to be interference with or infringement of any of
Licensee's rights.

ARTICLE 27
APPLICABLE LAW

This Agreement shall be construed and governed, in all respects, by the law of
the State of Ohio applicable to contracts made and to be performed in that state
without reference to any provisions relating to conflicts of law. Any legal
action or proceeding of any sort against Licensor by or on behalf of Licensee,
shall be brought in a court of competent jurisdiction in Cuyahoga County, Ohio.
<PAGE>

Page 18--

ARTICLE 28
NON-AGENCY OF PARTIES

This Agreement does not constitute or appoint Licensee as the agent or legal
representative of Licensor, or Licensor as the agent or legal representative of
Licensee, for any purpose whatsoever. Licensee is not granted any right or
authority to assume or to create any obligation or responsibility, express or
implied, on behalf of or in the name of, Licensor or to bind Licensor in any
manner or thing whatsoever; nor is Licensor granted any right or authority to
assume or create any obligation or responsibility, express or implied, on behalf
of or in the name of Licensee, or to bind Licensee in any manner or thing
whatsoever. No joint venture or partnership between the parties hereto is
intended or shall be inferred.

ARTICLE 29
AMENDMENTS AND WAIVERS BY LICENSOR

This Agreement may be amended or modified by Licensorj and Licensor may waive
any of its rights hereunder or performance by Licensee of any of its obligations
hereunder, only by instrument in writing. In the event Licensor shall at any
time waive any of its rights under this Agreement or the performance by Licensee
of any of its obligations hereunder, such waiver shall not be construed as a
continuing waiver of the same rights or obligations, or a waiver of any other
rights or obligations.

ARTICLE 30
ENTIRE AGREEMENT

This Agreement constitutes the entire Agreement between the parties as to the
Trademark Products, and supersedes all prior agreements and understandings
relating to this subject matter hereof.

<PAGE>
Page 19--

ARTICLE 31
SEPARABILITY OF PROVISIONS

If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provisions shall be fully
severable. The Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provisions had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid or enforceable.

ARTICLE 32
COUNTERPARTS; HEADINGS

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. The headings herein are set out for convenience of reference only
and shall not be deemed a part of this Agreement.

ARTICLE 33
BINDING EFFECT

This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and, subject to the provisions of Article 16 of this Agreement,
their respective permitted successors and assigns.
<PAGE>
Page 20--

ARTICLE 34
INDEMNIFICATION BY LICENSEE

34.1 INDEMNIFIED PARTIES; Basic Indemnification. For purposes of this paragraph,
"Indemnified Parties" refers to Licensor, and other licensees (not including
Licensee) of rights relating to the Trademark, and officers, directors,
employees, and agents of each of the foregoing, and persons connected with or
employed by them and each of them. Licensee hereby agrees that it shall
indemnify and hold harmless the Indemnified Parties and each of them from and
against the costs and expenses (including, without limitation, reasonable
attorneys fees and costs) of any and all claims, suits, losses, damages, costs,
demands, obligations, investigations, causes of action, and judgments arising
out of:

(a) the actual or alleged unauthorized use in connection with, or arising out
of, a Trademarked Product of any trademark (including, without limitation, the
Trademark), patent, process, method or device; (b) the actual or alleged
infringement in such connection of any copyrights, trade name or patent or any
act held to constitute libel, slander or defamation; (c) the invasion by
Licensee of the right of privacy, publicity, or other property right; (d) the
failure to perform of, or any defect in, or use of, the Trademarked Product,
including without limitation any injuries to the person or to property arising
therefrom; (e) the infringement or breach of other personal or property right of
any person, firm or corporation by Licensee, its officers, employees, agents, or
anyone directly or indirectly acting by, through, on behalf of, or pursuant to
contractual or any other relationship with Licensee; and (f) Licensee's sales
and/or promotional efforts.

34.2 INDEMNIFICATION FOR BREACH. Licensee hereby further agrees that it shall
indemnify and forever hold harmless the Indemnified Parties against and from any
and all claims, suits, losses, damages, costs, obligations, liabilities,
judgments, damages and expenses, including without limitation, reasonable
attorneys' fees arising out of breach or alleged breach by Licensee of any
provision of this Agreement, or any misrepresentation made by Licensee herein or
any act not expressly authorized herein. Licensee further agrees to insulate the
Indemnified Parties from any and ail product liability claims arising from the
use or misuse of the Trademarked Product.

34.3 SURVIVAL OF TERMS. The provisions of this Article 34 shall survive the
termination (or expiration) of this Agreement.
<PAGE>
Page 21-- -

ARTICLE 35
INFORMATION

35.1 CONFIDENTIALITY. Licensor and Licensee may from time to time disclose to
each other sales, engineering, applications, drawing, designs and any other
knowledge, information, techniques, know-how or data pertaining to the
manufacture, use, application, marketing, distribution and sales of the
Trademarked Product or other products of Licensor or Licensee (the
"Information"). Each party hereto shall hold in confidence all such data and
information and shall not disclose such data and information except to such
personnel and employees as are necessary for the effective performance of this
Agreement or as otherwise permitted by this Agreement. Licensor and Licensee
shall cause all data, documents or other written or printed materials embodying
the Information to be plainly marked to indicate the secret and confidential
nature thereof and to prevent unauthorized access thereto, or reproduction or
use thereof. Licensor and Licensee shall take any necessary action, including
court proceedings, to comply and to compel compliance with the provisions of
this Article 35. The obligations undertaken by Licensor and Licensee pursuant to
this Article 35 shall not apply to any such data or information which is or
becomes published or otherwise generally available to the public without fault
of a party hereto or is otherwise lawfully acquired by a party hereto and such
obligations shall, as so limited, survive the expiration or termination of this
Agreement. Upon termination of this Agreement, either Party hereto may request
the prompt return of all written materials received from the other Party
including originals, copies, extractions, translations and reproductions
thereof. This Agreement is not intended to and shall not be construed to give
either Party any vested right, title or interest in the Trademarked Product or
the Information.

35.2 CONFIDENTIALITY OF TERMS OF AGREEMENT. Licensee shall not disclose to any
third party information relating to the terms and conditions of this Agreement,
including royalty rates, the amounts of minimum NIV Sales or minimum royalties
or the amount of the initial royalty payment pursuant to this Agreement.

35.3 SURVIVAL OF TERMS. The provisions of this Article 35 shall survive the
termination of this Agreement.

ARTICLE 36
PUBLIC ANNOUNCEMENTS

Page 22--

shall give the other party reasonable notice of such announcement and shall
consult with the other party regarding the announcement.

36.2 IMMEDIATE DISCLOSURE OF PUBLIC ANNOUNCEMENTS. Licensee shall include
Licensor, and its agent, LMCA, among its list of recipients for press releases
and all other public announcements regarding its business, and provide such
information to Licensor and its agent simultaneous to its release to any and all
media outlets or other recipients.

ARTICLE 37
ADDRESSES FOR NOTICE

All notices, statements, consents, instructions or other documents required or
authorized to be given hereunder shall be in writing, and shall be delivered
personally to an officer, partner or authorized representative of the other
party or by certified mail, return receipt requested, addressed to the parties
concerned as follows:

to Licensee Newtech, Inc.
16550 N.W. 10th Avenue
Miami, Florida 33169
Facsimile: 305-624-8901

and to Licensor at: White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111
Facsimile: 216-252-8158

with copies to: Ms. Sharon Schiller, Trademark Counsel
White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111
Facsimile: 216-252-8158

and Mr. Allan R. Feldman
Leveraged Marketing Corporation of America
156 West 56th Street, Suite 1400
New York, New York 10019
Facsimile: 212-581-1461

and shall be deemed to have been given upon receipt.
<PAGE>

Page 23--

IN WITNESS WHEREOF, this Agreement is executed on the day and year
first written above.

White Consolidated Industries, Inc. (Licensor)

/s/ Stanley R. Miller
- ---------------------
By: Stanley R. Miller
Assistant Secretary

Newtech, Inc. (Licensee)

/s/ Joel Newman
- ----------------
By: Joel Newman
President

<PAGE>

EXHIBIT A

1. Radios
2. Phonographs
3. Tape Decks
4. CD Players
5. Compact Home Stereo Systems (exclude separate amplifiers, receivers,
tuners and speaker systems sold separately and not part of a self-contained
home theater system)
6. Telephones (excludes mobile phones, pager/beepers and other wireless
communications).
7. Telephone Answering Machines
8. Telephone Accessories (excludes facsimile machines)
9. Televisions
10. Videocassette recorders (VCR's)
11. TV/VCR Combinations

<PAGE>

AMENDMENT 1

AGREEMENT BETWEEN NEWTECH, INC.

and

WHITE-WESTINGHOUSE COMPANY,
DIVISION OF WHITE CONSOLIDATED INDUSTRIES, INC.

DATED 1 MAY 1996

THE NAME "Newtech Corporation" is hereby amended to read NEW M-TECH
CORPORATION, having its principal place of business at 16550 N.W. 10th Avenue,
Miami, Florida 33169, as shown in the Articles of Incorporation, organized under
the Laws of the State of Florida, effective October 25, 1990.

Except as hereby amended, the Agreement entered into and effective May
1, 1996 shall remain in full force and effect.

It is hereby agreed that this Amendment shall be effective as of May 1,
1996.

Signed this 5th day of August, 1996.

NEW M-TECH CORPORATION WHITE CONSOLIDATED INDUSTRIES, INC.

/s/ Joel Newman Stanley R. Miller
- --------------- -----------------
By: By: Stanley R. Miller
Its: Its: Assistant Secretary
<PAGE>
AMENDMENT 2

AGREEMENT BETWEEN NEW M-TECH CORPORATION

And

WHITE CONSOLIDATED INDUSTRIES, INC.

Dated May 1, 1996

In paragraph 5.2 Extension Terms, delete the following.

"Either party may terminate this agreement without cause, provided however, at
such termination shall not be permitted within the first 5 (five) years
following the Effective Date of this Agreement Notice of termination must be
given in writing to the other Party hereto 1 (one) year prior to the termination
date. Licensee shall have the right to sell off inventory of Trademarked Product
in accordance with Article 21. Neither Licensor nor Licensee shall be liable for
any compensation or damages by reason of such early termination."

Except as hereby amended, the Agreement entered into and effective May
1, 1996 shall remain in full force and effect.

It is hereby agreed that this Amendment shad1 be effective as of May l,
1996.

Signed this 23 day of May, 1997.

NEW M-TECH CORPORATION WHITE CONSOLIDATED INDUSTRIES, INC.

/s/ Joel Newman Stanley R. Miller
- --------------- -----------------
By: By: Stanley R. Miller
Its: Its: Assistant Secretary
<PAGE>

AMENDMENT 3

AGREEMENT BETWEEN NEW M-TECH CORPORATION

And

WHITE CONSOLIDATED INDUSTRIES, INC.

DATED MAY 1, 1996

In Article 34 INDEMNIFICATION BY LICENSEE, insert the following new
paragraph 34.2.

34.2 LICENSEE INDEMNIFICATION PARTIES; BASIC INDEMNIFICATION. For
purposes of this Section, "Licensee Indemnification Parties" refers to Licensee
and officers, directors, employees and agents of Licensee. Licensor shall
indemnify and hold harmless the Licensee Indemnified Parties and each of them
from and against the cost and expenses (including, without limitation,
reasonable attorneys fees and costs) of any and all claims, suits, losses,
damages, costs, demands, obligations, investigations, causes of action, and
judgements arising out of any assertion or allegation by any persons, entities
of government agencies that any Trademark infringes any trademark, trade name or
any other personal or property right of a third party.

Re-number existing 34.2 as 34.3 re-number existing 34.3 as 34.4.

It is hereby agreed that this Amendment shall be effective as of May 1,
1996.

Signed this 9 day of June, 1997.

NEW M-TECH CORPORATION WHITE CONSOLIDATED INDUSTRIES, INC.

/s/ Joel Newman Stanley R. Miller
- --------------- -----------------
By: By: Stanley R. Miller
Its: Its: Assistant Secretary

EXHIBIT 10.5

TRADEMARKS LICENSE AGREEMENT

AGREEMENT entered into as of September 15, 1997, by and between White
Consolidated Industries, Inc., a Delaware Corporation, having its principal
office at 11770 Berea Road, Cleveland, Ohio 44111 ("Licensor"), New M-Tech
Corporation, a Florida Corporation, having its principal office at 16550 N.W.
10th Avenue, Miami, Florida 33169 (hereinafter referred to as "Licensee").

WHEREAS, Licensor is the owner of the Trademark White-Westinghouse and
associated designs and trade dress, (together, the "Trademarks"), and is using
the Trademarks throughout the World, and

WHEREAS, Licensor has the right to grant Licensee the license, right and
permission to use the Trademarks, and

WHEREAS, Licensee is in the business of manufacturing, distributing and selling
articles described and specified hereinafter (the "Products"), and desires to
secure the license, right and permission to use the Trademarks upon, and in
connection with, the manufacturing, distributing and selling of such Products;
and

WHEREAS, the Products that are the subject of this Agreement have been defined
by the parties as portable consumer microwave oven products listed on Exhibit A
hereto (and any other articles which the parties mutually agree to be subject to
the provisions of this Agreement which, in accordance with the terms of this
Agreement, bear the Trademarks (collectively, the "Trademarked Product").

WHEREAS, Licensor desires to grant to Licensee, and Licensee desires to accept
from Licensor, a license to use the Trademarks in the design, manufacture,
advertising, sale and- promotion of the Products, subject to each of the terms,
provisions and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
covenants and provisions contained herein, the parties hereto do hereby agree as
follows:

<PAGE>

Page 2--

ARTICLE 1
GRANT OF LICENSE AND DESIGNATION OF TRADEMARKED PRODUCT

Effective upon the execution of this Agreement, Licensor hereby grants to
Licensee, for the period hereinafter specified and upon the terms, provisions
and conditions of this Agreement, the exclusive right and license to use the
Trademarks within the geographic area described in Article 2 hereof, in the
design, manufacture, advertising, sale and promotion of the Trademarked Product.
Licensor recognizes that Licensee's wholly-owned subsidiary Newtech(HK), Ltd.,
a Hong Kong corporation having its principal offices [orated at Room 909,
Holywood Plaza, 610 Nathan Road, Kowloon, Hong Kong, may from time to time ship
Trademarked Product directly to Licensee's customers.

In the event of any disputes between the parties to this Agreement regarding the
definition of Trademarked Product, the final decision regarding such definition
shall rest in Licensor's sole and absolute discretion. The rights granted to
Licensee herein are limited to use on or in connection with the Trademarked
Product and Licensee specifically agrees not to use the Trademarks in any manner
or on any product, service or item, except as set forth in the Agreement.

ARTICLE 2
GEOGRAPHIC AREA

The rights granted to Licensee hereunder may be exercised by Licensee within the
USA, Canada and Puerto Rico (the "Territory"), and Licensee shall have exclusive
rights with respect to the Trademarked Product. Upon Licensee's request,
Licensor may, in its discretion, extend the areas in which Licensee may exercise
said rights, but any such extension shall, in each instance, be evidenced by a
written and duly executed amendment to this Agreement for such periods and upon
such terms and conditions as shall be determined by Licensor. From time to time
Licensor may wish to purchase Trademarked Product for sale outside the
Territory. Licensee agrees to sell Trademarked Product to Licensor at the same
price Licensee sells Trademarked Product to its best customer.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LICENSOR

<PAGE>

Page 3--

3.4 OWNERSHIP OF TRADEMARKS. Licensor is the owner of the Trademarks and, to
Licensor's knowledge, the use of the Trademarks in the design, manufacture,
advertising, sale and promotion of any of the Trademarked Product will not
infringe any intellectual property or any other rights of any third party.

3.5 RIGHT TO GRANT LICENSE. Licensor has the full right, power and authority to
grant the license as set forth in Article 1 hereof.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LICENSEE

<PAGE>

Page 4--

ARTICLE 5
TERM OF AGREEMENT

5.1 CONTRACT TERM. The Contract Term of this Agreement commence of the date
first mentioned above and ending on December 31, 2002 at midnight Eastern
Standard Time, unless sooner terminated pursuant to the terms of this Agreement.

5.2 EXTENSION TERMS. Licensor hereby grants to Licensee the option to extend the
term of this Agreement for up to six (6) two (2) year periods commencing as of
January 1, 20003 and ending on December 31, 2014, at midnight Eastern Standard
Time, unless sooner terminated pursuant to the terms of this Agreement with such
extended terms to be subject to the same terms and must achieve specified levels
of Minimum Sales during the then preceding Contract or Extension Term of this
Agreement as set forth in Article 8 hereof. Such options to extend the term of
this Agreement must be exercised by Licensee, if at all, by giving written
notice to Licensor at least one hundred and twenty (120) days prior to the
expiration of the then preceding Contract Term of this Agreement. Nine months
(270 days) prior to the end of the fourteenth extension, the parties will
negotiate, in good faith, the possibility of extending this Agreement for one or
more extension periods.

ARTICLE 6
ROYALTIES

6.1 EARNED ROYALTIES. Subject to of Article 7 hereof, Lieensee shall pay to
Licensor for the rights granted hereunder a sum equal to [*****] of the Net
Invoice Value of Trademarked Products Sold by Licensee (the "Royalties").

The Royalties shall be remitted in accordance with Section 7.4 of this
Agreement.

6.2 DEFINITION OF NET INVOICE VALUE. As used throughout this Agreement, the
term "Net Invoice Value" shall mean the aggregate of the invoiced amounts of
Trademarked Product sold by Licensee, less (a) returned goods, refunds, credits
and allowances actually made or allowed to customer with respect to Trademarked
Product, (b) freight or handling charges charged to customers or incurred on
returned goods, and (c) sales and excise taxes actually paid ("NIV").

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 5--

ARTICLE 7
MINIMUM ROYALTY PAYMENTS

7.1 MINIMUM ROYALTY PAYMENTS. The Minimum Royalties for the Contract Term shall
be paid one hundred twenty five thousand dollars ($125,000) in advance on
execution of this Agreement and the balance in twenty (20) equal installments of
$27,500 paid quarterly beginning March 30, 1998 and throughout the remainder of
the contract period. Each installment is due on or before the 30th day of each
March, June, September and December. The Minimum Royalties for each Extension
Term as shown below shall be paid in four (4) equal installments each by the
30th day of March, June, September and December of the respective term.

7.1A Licensee shall not be in default of this Paragraph if the minimum royalties
paid pursuant to a Trademark Licensee Agreement between White Consolidated
Industries and Electronic Industries of America, Inc., of even date, and the
royalties paid pursuant to this Agreement equal the minimum royalty payments set
forth below.

Term Year(s) Minimum
- ---- ------- Royalties
Contract ---------
Term 1997/2002 1,350,000

First Extension Term 2003/2004 975,000
Second Extension Term 2005/2006 1,050,000
Third Extension Term 2007/2008 1,125,000
Fourth Extension Term 2009/2010 1,200,000
Fifth Extension Term 2011/2012 1,275,000
Sixth Extension Term 2013/2014 1,350,000

7.2 INITIAL ROYALTY PAYMENT. Licensee shall pay Licensor an initial royalty
payment (the- "Initial Royalty Payment") of [*****] upon execution of this
Agreement. The Initial Royalty Payment shall be applied against the first
Royalties payable pursuant to Section 7.4 of this Agreement.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 6--

7.4 QUARTERLY REPORTS OF SALES AND ROYALTY PAYMENTS. On or before the twentieth
(20thj day of each January, April, July and October during the Contract Term and
any Extension Term, Licensee shall deliver to Licensor the following: (i) a
written statement, certified to be true and correct by the Chief Financial
Officer of Licensee, setting forth the Gross an NIV sales for each Trademarked
Product during the preceding calendar quarter and a calculation of the Royalties
payable under Article 6 and 7 of this Agreement for such period, and (ii) a
check payable to Licensor in full payment of the amount due under Article 6 and
7 of this Agreement for such period. Each royalty payment, payable in US
currency, shall be remitted by check at Licensor's address as provide by this
Agreement.

7.5 In the event that during any of the Terms of the Agreement, the aggregate
retail sales of microwave ovens in the United States decreases from the prior
Term (the amount of such reduction of sales of microwave ovens in the United
States is hereinafter express as a percentage and the amount by which such
percentage exceeds [*****]% is hereinafter referred to as the to as the
"Reduction Percentage"), then the Minimum Sales Commitment for the Term
following the Prior Term (the "Adjustment Period") shall be reduced. This
reduction shall be in an amount (the "Reduction Amount") equal to (i) the higher
of (A) the Minimum Sales Commitment for the Adjustment Period or (B) the actual
sales by Newtech of microwave ovens during the Prior Term (the "Actual Prior
Term Sales") multiplied by (ii) the Reduction Percentage. The Reduction amount
will then be subtracted from the higher of (i) the Minimum Sales Commitment for
the Adjustment Period or (ii) the Actual Prior Term Sales, to determine the new
Minimum Sales Commitment for the Adjustment Term; provided, however that if this
computation yields an amount greater than the Minimum Sales Commitment for such
Term, then no adjustment shall be made. For purpose of this section, sales for
microwave ovens in the United States shall be determined by reference to
applicable information published in the most widely-circulated trade publication
containing such information; provided that if Licensor and Licensee are unable
to agree upon the publication from which such information is be derived, then
the applicable information shall be derived by reference to applicable
information shall be derived by reference to a trade publication selected by the
licensor and a trade publication selected by the licensee, and the applicable
sales information shall be determined on the basis of the average of the data
contained on the two publications.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 7--

ARTICLE 8
MINIMUM SALES OF TRADEMARKED PRODUCT

8.1 FAILURE TO MEET REQUIRED MINIMUM SALES. Licensee shall use its best efforts
to advertise and sell Trademarked Product in the Territory during the term of
this Agreement. Should Licensee fail to achieve the NIV sales over any two
consecutive terms as set forth below in this Article 8 then Licensor may, at its
option, elect to terminate this Agreement by written notice delivered to
Licensee with sixty (60) days after the end of any period in which Licensee
failed to achieve such required Minimum Sales Such termination shall be
effective upon delivery of said notice but shall not affect Licensee's
outstanding indebtedness to Licensor or any of the provisions relating thereto.

8.1A. Licensee shall not be in default of this Paragraph if The Minimum Sales
generated pursuant to a Trademark License Agreement between White Consolidated
Industries and Electronic Industries of America, Inc., of even date, and The
minimum sales generated pursuant to this Agreement equal the minimum sales set
forth below.

Contract Term [*****]
First Extension Term [*****]
Second Extension Term [*****]
Third Extension Term [*****]
Fourth Extension Term [*****]
Fifth Extension Term [*****]
Sixth Extension Term [*****]

ARTICLE 9
ADVERTISING AND ART WORK

9.2 Art Work. Licensor shall make available to Licensee any and all necessary
film, photostats, artwork and full color reproductions of its Trademarks,
artwork, designs and other materials necessary for Licensee's use in accordance
with this Agreement.

9.2 ART WORK. Licensor shall make available to Licensee any and all necessary
film, photostats, artwork and full color reproductions of its Trademarks,
artwork, designs and other materials necessary for Licensee's use in accordance
with this Agreement.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 8--

ARTICLE 10
LICENSEE'S RECORDS

ARTICLE 11
LICENSEE'S ANNUAL REPORTS AND ANNUAL ROYALTY PAYMENTS

On or before the fifteenth (15th) day of the second (2nd) month following the
end of Licensee's fiscal year, Licensee shall render to Licensor a statement
certified by Licensee's Chief Financial Officer disclosing gross and NIV Value
of sales, Royalties due and Royalties paid for Licensee's preceding fiscal year,
and for any Contract or Extension Term which ended within said fiscal year. If
said statement discloses that the amount of Royalties paid during any period to
which said statement relates was less than the amount required to be- paid under
the provisions of this Agreement, Licensee shall pay said deficiency concurrent
with the delivery of the statement. If said statement discloses the Licensee has
paid Royalties in excess of the amounts required to be paid, Licensor shall
apply said excess to the next Royalty payment.

<PAGE>

Page 9--

ARTICLE 12
AUDIT BY LICENSOR

At all times during the existence of this Agreement and for twelve (12) months
after the last report is rendered hereunder, Licensor, if it so chooses, may
cause its independent accountants to audit all books and records of Licensee
pertaining Trademarked Product. Licensor shall have the further right to engage
an independent certified public accounting firm, to audit the books and records
of Licensee with regards to the Royalties due hereunder. In the event any such
audit shall disclose that the Licensee has understated NIV Sales or underpaid
Royalties for any reporting period, Licensee shall forthwith and upon written
demand of Licensor, pay the amount, if any, by which the Royalties owing exceed
Royalties paid, plus interest of twelve percent (12%) per annum on such
delinquent amounts, accruing from the date on which such amounts became
delinquent to the date on which such delinquent amounts were paid. In the event
that Licensee has understated NIV Sales and consequently has underpaid Royalties
in excess of One Thousand dollars ($1,000) of amount due for any Contract Term,
Licensee shall forthwith and upon written demand also pay all costs, fees and
expenses incurred by Licensor in conducting such audit, including, without
limitation, reasonable travel expenses. Should such audit disclose that the
Royalties paid exceed the Royalties due, any excess revealed by such audit will
be remitted to Licensee.

ARTICLE 13
LICENSEE OBLIGATIONS

13.1 LICENSEE DILIGENCE. Licensee shall design, manufacture, advertise, sell and
ship the Trademarked Product and shall continuously and diligently during the
term hereof procure and maintain facilities and trained personnel sufficient and
adequate to accomplish the foregoing, all to the extent and in a manner no less
thorough, diligent and professional than the same accorded by Licensee for
Licensee's most favored premium products and/or services. A cessation of the
above for a continuous period of ninety (90) days shall be grounds for
termination by Licensor, without notice. The marketing of Trademarked Product
shall be conducted in a manner consistent with enhancing the long-term value of
the Trademarks. It is the interest of the parties that Trademarked Product be
sold simultaneously through a wide range of retailers. Accordingly, Licensee
shall continuously and diligently design, price and promote Trademarked Product
to retailers in all major class of trade including department stores (i.e.,
Macy's, Burdine's, Bloomingdale's, etc.), mass merchants (i.e. Walmart, Kmart,
etc.), regional discounters (i.e., Caldor, Bradlees, etc.), warehouse clubs
(i.e., Target, Sam's, etc.), specialty electronics chains (i.e., The Wiz, etc.)
mail order, premium and television shopping services. Licensee shall exhibit
Trademarked Product in exhibit or booth space at the annual electronics show.

<PAGE>

Page 10--

13.2 LICENSOR INSPECTION RIGHTS. Licensor shall have the right to inspect any of
Licensee's facilities pertaining to the Trademarked Product, during regular
business hours. Licensor shall conduct such inspection in the presence of an
officer, partner or authorized representative of Licensee.

13.4 FORFEITURE OF TRADEMARK FOR NON-USE. Licensee's failure to ship Trademarked
Product Trademark by December 31, 1998 shall be deemed a forfeiture of its grant
to use the Trademarks. Failure of Licensee to ship Trademarked Product for a
period of one (1) year shall be deemed a forfeiture of its grant to use the
Trademarks.

13.5 Financial Standards. Licensee shall provide its financial statements to
Licensor annually or as requested by Licensor, which are to be prepared in
accordance with U.S. GMP. Licensee must promptly notify Licensor of a
termination of any significant line of credit or guarantee of indebtedness by
personal guarantor. Should Licensee's net worth fall below $2,000,000 in the
aggregate, Licensor may at its option terminate this Agreement. Likewise
Licensor may terminate this Agreement immediately if any of the following events
occur:

1) Licensee is in default under the provisions of any line of credit or
debt agreement with financing institution.

2) A sale or transfer of Licensee's assets which, in Licensor's opinion,
may affect the ability of Licensee to operate the business pursuant to
this Agreement, or

3) Licensee incurs net operating losses in the aggregate for three or more
consecutive years.

ARTICLE 14
APPROVALS AND QUALITY STANDARDS

14.1 Advance Approval. Prior to any use of any Trademarks, Licensee shall, at
Licensee's expense' submit to Licensor, for Licensor's written approval, the
following: (a) two (2) specimens of each Product on which the Trademarks is to
appear (the "Specimens"); (b) all artwork which Licensee intends to use in
connection with the Trademarks; and (c) all packaging, advertising and
promotional literature which Licensee intends to use in the marketing or
merchandising of the Trademarked Product. Licensor shall give Licensee written
notice of approval or disapproval within ten t10) business days from its receipt
of the Specimens, and should Licensor disapprove, its written notice shall

<PAGE>
Page 11--

explain in detail the reasons for disapproval so that Licensee may prepare and
submit new Specimens and/or samples.

14.3 PERIODIC SAMPLES. Thereafter, consecutively at four (4) month intervals,
Licensee shall, at Licensee's expense; submit to Licensor not less than two (2)
randomly selected production run samples of the Trademarked Product.

14.4 APPROVED QUALITY STANDARDS. Without the prior written approval of Licensor,
Licensee shall not sell or distribute any Trademarked Product which deviates
from the Approved Quality more than the deviation which would occur as a result
of normal deviations in raw material characteristics.

14.6 PERIODIC REVIEW MEETINGS. Licensee will conduct periodic meetings with
Licensor to review Licensee's progress and performance under the terms of this
Agreement.

ARTICLE 15
RESTRICTIONS UPON SUBCONTRACTS

Licensee is responsible for the work of any subcontractor and for any debts,
obligations or liabilities incurred by any such subcontractor in connection
with the Trademarked Product. Licensee shall discontinue using any subcontractor
who shall fail to comply with the Approved Quality standards and/or delivery
schedules required by Licensee or Licensor.
<PAGE>
Page 12--

ARTICLE 16
ASSIGNMENT; TRANSFERS; SUBLICENSE

The parties hereby acknowledge the substantial personal service nature of
Licensee's obligations hereunder. Therefore, without the prior written consent
of Licensor, which consent will not be unreasonably be withheld, Licensee shall
not voluntarily or by operation of law assign or transfer this Agreement or any
of Licensee's rights or duties hereunder or any interest of Licensee herein, nor
shall Licensee enter into any sublicense for the use of the Trademarks by
others. Any assignment, transfer or sub-license without Licensor's written
consent shall be void and at the option of the Licensor shall constitute a
default hereunder. For purposes of this Article 16, the failure of Windmere
Corporation, a Florida Corporation, having its principal offices at 5980 Miami
Lakes Drive, Miami Lakes, Florida, 33014, and Joel Newman, President of New
M-Tech Corporation (Licensee) to maintain ownership of at least 51% of the
outstanding voting stock of Licensee an shall be deemed an attempted assignment
of this Agreement, unless Licensee has made a public offering of its voting
stock in which case New M-Tech corporation and Windmere need not retain 51% of
the voting stock.

ARTICLE 17
NO DILUTION OF TRADEMARKS OR ATTACK UPON TRADEMARKS

17.1 LIMIT ON USE. Licensee shall not at any time use, promote, advertise,
display or otherwise publish any Trademarks or any material utilizing or
reproducing any Trademarks in whole or in part, except as specifically provided
in this Agreement, without the prior written consent of Licensor, which consent
shall not be unreasonably withheld.

17.2 NOTICE. Licensee shall cause to appear on all Trademarked Product and on
all materials on, or in connection with which any Trademarks is used, such
legends, markings and notices as may be required by law to give appropriate
notice of all Trademarks, trade name or other rights therein or pertaining
thereto.

17.3 MATERIALS AND DOCUMENTS. Licensee shall provide all materials and execute
all documents required by law incident to the maintenance and/or preservation of
the Trademarks and Licensor's rights therein.

17.4 NO CONTEST OF TRADEMARKS VALIDITY. Licensee shall not contest the validity
of the Trademarks or any rights of Licensor therein, nor shall Licensee
willingly become an adverse party in litigation in which others shall contest
the Trademarks or Licensor's said rights. In addition thereto, Licensee shall
not in any way seek to avoid its obligations hereunder because of the assertion
or allegation by any persons, entities or government agencies, bureaus, or
instrumentalities that any Trademarks is invalid or ineffective or by reason of
any contest concerning the rights of Licensor therein.
<PAGE>

Page 13--

17.5 NO OTHER TRADEMARKS PROTECTION. Licensee agrees not to seek any state,
Federal, foreign or other statutory Trademarks or service mark or other
protection for the Trademarks as they are used in connection with the Licensee's
goods or services and all use of the Trademarks shall be for the sole benefit of
the Licensor.

ARTICLE 18
INFRINGEMENT AND OTHER TRADEMARKS LITIGATION

18.1 TRADEMARKS DEFENSE. Licensee shall apprise Licensor immediately upon
discovery of any possible infringement of the Trademarks which comes to the
attention of the Licensee.
Licensor, at its sole cost and expense, and in its own name, may prosecute and
defend any action or proceeding which Licensor deems necessary or desirable to
protect the Trademarks, including but not limited to actions or proceedings
involving their infringement. Upon written request by Licensor, Licensee shall
join Licensor at Licensor's sole expense in any such action or proceeding.
However, Licensee shall not commence any action or proceeding to protect the
Trademarks or any action or proceeding alleging infringement thereof without the
prior written consent of Licensor. Licensee may prosecute and defend, I at its
sole expense and in its own name, any action or proceeding to protect its
designs or styles. Any and all damages recovered in any action or proceeding
commenced by Licensor shall belong solely and exclusively to Licensor.

18.2 NO LIABILITY FOR VIOLATION. Licensor shall have no liability to Licensee or
any other person, nor shall be there by any right of contribution against
Licensor therefore, for any action or proceeding alleging any violation of any
antitrust, trade regulation, or similar statute, or for unfair competition.
Furthermore, in the event of any threatened or actual action or proceeding in
which Licensee and Licensor are or may be charged with jointly violating any
antitrust, trade regulation or similar statute, or any law pertaining to unfair
competition, Licensee may, at its option, elect to be represented in such
threatened or actual action or proceeding by Licensor's counsel at no cost to
Licensee for fees, costs or- expenses. Should Licensee elect in such event to be
represented by Licensor's counsel, then Licensee shall relinquish any right to
control or direct such threatened or actual action or proceeding, and Licensor
shall maintain full control thereof. Such representation of Licensee shall
continue only so long as Licensor's counsel, in its sole and absolute
discretion, believes that it may properly and ethically represent both Licensor
and Licensee. In the event that Licensor's counsel decides that it may no longer
properly and ethically represent both Licensor and Licensee, then Licensor's
counsel shall continue to represent Licensor only, and Licensee's continued
defense shall be at Licensee's sole expense and shall be conducted by separate
counsel.

<PAGE>
Page 14--

ARTICLE 19
ADDITIONAL RESTRICTIONS UPON USE OF TRADEMARKS

19.1 IDENTIFICATION OF TRADEMARKED PRODUCT. It is the intention of the parties
hereto and the purpose of this Article 19 that all of the Trademarked Product be
identified to the general public by the Trademarks. Licensee shall use a
registration indicator in the form of a circled-R or "TM" symbol in conjunction
with the Trademarks when so instructed by the Licensor. Licensee further agrees
to assist Licensor in obtaining registrations for the Trademarks in the event
any Trademarks is not yet registered for the Trademarked Product. Licensee shall
use notice language in the manufacture, sale, advertising or other promotion of
the Trademarked Product as follows: "White-Westinghouse is a registered
Trademark of White Consolidated Industries, Inc. and is used under license" or
other such language as a Licensor designates in writing.

ARTICLE 20
DEFAULTS BY LICENSEE

20.1 DEFAULTS. Except as otherwise expressly provided in this Agreement, in the
event Licensee shall default in the performance of any of the terms, conditions
or obligations to be performed by Licensee hereunder, and if such default
involves the payment of money and same shall not be cured within ten (10) days
after Licensor gives written notice to Licensee of such default, or if such
default involves performance other than the payment of money and the same is not
cured within fifteen (15) days after Licensor gives written notice to Licensee
of such default, then and in any such event, Licensor may immediately and
without prior notice terminate this Agreement and all of the rights and
obligations hereunder (except as otherwise expressly provided by this
Agreement). in the event that a Receiver is appointed to, or one or more
creditors take possession of all, or substantially all, of the assets of the
Licensee, or if Licensee shall make a general assignment for the benefit of
creditors, or if any action is taken or suffered by Licensee under any state or
Federal insolvency or bankruptcy act, then this Agreement and all of the rights
and obligations hereunder (except as otherwise expressly provided by this
Agreement) shall immediately, and without notice or need of any further action
by any party hereto, terminate.

<PAGE>
Page 15--

ARTICLE 21
LICENSOR'S RIGHTS TO DESIGNS, ETC., UPON TERMINATION

21.1 RIGHTS UPON TERMINATION. In the event this Agreement is terminated for any
reason, or expires according to its terms, Licensee shall assign, transfer and
transmit to Licensor any and all rights of Licensee in the Trademarks, including
associated goodwill, and shall not thereafter manufacture, sell or use the
Trademarks in any manner; provided that, Licensee may however, dispose of its
stock of Trademarked Product on hand within [*****] after the termination of
this Agreement; provided, however, all sums due to Licensor have first been
paid; and, further provided, that Licensee shall, prior to the effective date of
said termination, deliver to Licensor a detailed schedule of all inventory of
Trademarked Product in Licensee's possession (constructive or otherwise). After
the expiration of the aforesaid [*****] period, Licensee shall destroy all
Trademarked Product and packaging and promotional material remaining in
Licensee's possession which are identified in any manner by or with the
Trademarks. Notwithstanding the above, Licensor shall have the right to purchase
such excess stock of Trademarked Product, in whole or in part, prior to any sale
or offer of sale by Licensee to any third party, for an amount equal to the
wholesale cost of such Trademarked Product. It is specifically understood and
agreed that the Licensee's right to dispose of stock shall be conditioned upon
the absence of harm to the Trademarks and/or the reputation of the Licensor
arising from the Licensee's use of the Trademarks, as determined by the Licensor
in its sole discretion.

21.2 CONTINUATION OF AGREEMENT TERMS. Licensee shall continue to abide by the
terms of this Agreement with respect to such Trademarked Product during the
period in which disposition pursuant to Article 21.1 of this Agreement is taking
place. Neither Licensee nor any creditor (judgment or otherwise), assignee,
transferee, trustee, or receiver of Licensee, or similar person or officer, or
purchaser other than in the regular course of Licensee's business may sell or
transfer any Trademarked Product until and unless all sums due Licensor from
Licensee have been paid. Further, upon termination of this Agreement, all
labels, signs, packages, wrappers, cartons, circulars, advertisements, and other
items bearing or containing any reproduction or representation of any of the
Trademarks shalL automatically and without cost to Licensor become the property
of Licensor, and Licensee shall immediately deliver the same to Licensor's place
of business or other location designated by Licensor. The reasonable cost of
such delivery shall be paid by the Licensor.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

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21.4 NO RIGHT IN LICENSEE. Except for the right to use the Trademarks as
specifically provided for in this Agreement, (i) Licensee shall have no right,
title or interest in or to the Trademarks, and (ii) upon and after the
termination of this Agreement, all rights granted to Licensee hereunder,
together with any interest in and to the Trademarks that Licensee may acquire,
shall forthwith and without further act or instrument be assigned to and revert
to the Licensor. In addition, Licensee shall execute any instruments requested
by Licensor to accomplish or confirm the foregoing. Any such assignment,
transfer or conveyance shall be without consideration other than the mutual
agreements contained herein.

21.5 SURVIVAL OF TERMS. The provisions of this Article 21 shall survive the
termination (or expiration) of this Agreement.

ARTICLE 22
ADDITIONAL RIGHTS PRIOR TO TERMINATION

During the final Contract Year of the Term hereof, Licensor shall have the right
to design and manufacture merchandise of the types covered by this Agreement and
to negotiate and conclude such Agreements as it desires pursuant to which it may
grant licenses to any party or parties of any or all of the rights herein
granted to Licensee; provided, however, that no merchandise herein identified as
Trademarked Product shall be shipped by Licensor or any third party other than
Licensee prior to the expiration or termination of this Agreement (exclusive of
the additional [*****] period for the disposition of the Trademarked Product as
provided in Article 21 hereof).

ARTICLE 23
GOODWILL

Licensee acknowledges and recognizes that the Trademarks are of substantial
significance and value to Licensor and that said Trademarks have acquired
valuable secondary meaning, value and goodwill. Except as may be otherwise
specified in this Agreement,: Licensee shall not use any of the Trademarks or
any name or symbol similar thereto as part of its name or symbol or as part of
the name or symbol of any corporation, partnership, joint venture,
proprietorship or other entity or person which it controls or with which it is
affiliated.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 17--

ARTICLE 24
INSURANCE

Licensee shall at all times carry product liability insurance with respect to
the Trademarked Product with a limit of liability of not less than [*****] and
Licensor shall be named therein as coinsured as its interests may appear. Such
insurance may be obtained in connection with a policy of product liability
insurance which covers products other than the Trademarked Product and shall
provide for at least thirty (30) days prior written notice to Licensor of the
cancellation or substantial modification thereof. Licensee shall deliver to
Licensor a certificate evidencing the existence of such insurance policies
promptly after their issuance.

ARTICLE 25
AGENTS,FINDERS AND BROKERS

ARTICLE 26
RESERVED RIGHTS

Rights not herein specifically granted to Licensee are reserved by Licensor and
may be used by Licensor without limitation. Any use by Licensor of such reserved
rights, including but not limited to the use or authorization of the use of any
Trademarks in any manner whatsoever not inconsistent with Licensee's right
hereunder, shall not be deemed to be interference with or infringement of any of
Licensee's rights.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 18--

ARTICLE 27
APPLICABLE LAW

ARTICLE 28
NON-AGENCY OF PARTIES

ARTICLE 29
AMENDMENTS AND WAIVERS BY LICENSOR

This Agreement may be amended or modified by Licensor, and Licensor may waive
any of its rights hereunder or performance by Licensee of any of its obligations
hereunder! only by instrument in writing. In the event Licensor shall at any
time waive any of its rights under this Agreement or the performance by Licensee
of any of its obligations hereunder, such waiver shall not be construed as a
continuing waiver of the same rights or obligations, or a waiver of any other
rights or obligations.
<PAGE>

Page 19--

ARTICLE 30
ENTIRE AGREEMENT

This Agreement constitutes the entire Agreement between the parties as to the
Trademarked Products, and supersedes all prior agreements and understandings
relating to this subject matter hereof.

ARTICLE 31
SEPARABILITY OF PROVISIONS

ARTICLE 32
COUNTERPARTS; HEADINGS

ARTICLE 33
BINDING EFFECT

Page 20--

ARTICLE 34
INDEMNIFICATION BY LICENSEE

34.1 INDEMNIFIED PARTIES; BASIC INDEMNIFICATION. For purposes of this paragraph,
"Indemnified Parties" refers to Licensor, and other licensees (not including
Licensee) of rights relating to the Trademarks, and officers, directors,
employees, and agents of each of the foregoing, and persons connected with or
employed by them and each of them. Licensee hereby agrees that it shall
indemnify and hold harmless the Indemnified Parties and each of them from and
against the costs and expenses (including, without limitation, reasonable
attorneys fees and costs) of any and all claims, suits, losses, damages, costs,
demands, obligations, investigations, causes of action, and judgments arising
out of:

(a) the actual or alleged unauthorized use in connection with, or arising out
of, a Trademarked Product of any Trademarks (including, without limitation, the
Trademarks), patent, process, method or device;
(b) the actual or alleged infringement in such connection of any copyrights,
trade name or patent or any act held to constitute libel, slander or defamation;
(c) the invasion by Licensee of the right of privacy, publicity, or other
property right;
(d) the failure to perform of, or any defect in, or use of, the Trademarked
Product, including without limitation any injuries to the person or to property
arising therefrom;
(e) the infringement or breach of other personal or property right of any
person, firm or i corporation by Licensee, its officers, employees, agents, or
anyone directly or indirectly acting by, through, on behalf of, or pursuant to
contractual or any other relationship with Licensee; and
(f) Licensee's sales and/or promotional efforts.

34.2 LICENSEE INDEMNIFIED PARTIES; BASIC INDEMNIFICATION. For purpose of this
Section, "Licensee Indemnification Parties. refers to Licensee and officers,
directors, employees and agents of Licensee. Licensor shall indemnify and hold
harmless the Licensee Indemnified Parties and each of them from and against the
cost and expenses (including, without limitation, reasonable attorneys fees and
costs) of any and all claims, suits, losses, damages, costs, demands,
obligations, investigations, causes of action, and judgements arising out of any
assertion or allegation by any persons, entities of government agencies that any
Trademark infringes any trademark, trade name or any other personal or property
right of a third party.

34.3 INDEMNIFICATION FOR BREACH. Licensee hereby further agrees that it shall
indemnify and forever hold harmless the Indemnified Parties against and from any
and all claims, suits, losses, damages, costs, obligations, liabilities,
judgments, damages and expenses, including without limitation, reasonable
attorneys' fees arising out of breach or alleged breach by Licensee of any
provision of this Agreement, or any misrepresentation made by Licensee herein or
any act not expressly authorized herein. Licensee further agrees to
<PAGE>

Page 21--

insulate the Indemnified Parties from any and all product liability claims
arising from the use or misuse of the Trademarked Product.

34.4 SURVIVAL OF TERMS. The provisions of this Article 34 shall survive the
termination (or expiration) of this Agreement.

ARTICLE 35
INFORMATION

35.1 CONFIDENTIALITY. Licensor and Licensee may from time to time disclose to
each other sales, engineering, applications, drawing designs and any other
knowledge, information, techniques, know-how or data pertaining to the
manufacture, use, application, marketing, distribution and sales of the
Trademarked Product or other products of Licensor or Licensee (the
"Information"). Each party hereto shall hold in confidence all such data and
information and shall not disclose such data and information except to such
personnel and employees as are necessary for the effective performance of this
Agreement or as otherwise permitted by this Agreement. Licensor and Licensee
shall cause all data, documents or other written or printed materials embodying
the information to be plainly marked to indicate the secret and confidential
nature thereof and to prevent unauthorized access thereto, or reproduction or
use thereof. Licensor and Licensee shall take any necessary action, including
Court proceedings, to comply and to compel compliance with the provisions of
this Article 35. The obligations undertaken by Licensor and Licensee pursuant to
this Article 35 shall not apply to any such data or information which is or
becomes published or otherwise generally available to the public without fault
of a party hereto or is otherwise lawfully acquired by a party hereto and such
obligations shall, as so limited, survive the expiration or termination of this
Agreement. Upon termination of this Agreement, either Party hereto may request
the prompt return, of all written materials received from the other Party
including originals, copies, extractions, translations and reproductions
thereof. This Agreement is not intended to and shall not be construed to give
either Party any vested right, title or interest in the Trademarked Product or
the Information.

35.3 SURVIVAL OF TERMS. The provisions of this Article 35 shall survive the
termination of this Agreement.
<PAGE>
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ARTICLE 36
PUBLIC ANNOUNCEMENTS

36.1 Unless expressly approved in advance in writing by the other party, neither
shall make any public announcement regarding the subject matter or existence of
this Agreement except as required by law. If such announcement is required by
law, the announcing party shall give the other party reasonable notice of such
announcement and shall consult with the other party regarding the announcement.

ARTICLE 37
ADDRESSES FOR NOTICE

to Licensee New M-Tech Corporation
16550 N.W. 10th Avenue
Miami, Florida 33169
Facsimile: 305-624-8901

and to Licensor at: White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111
Facsimile: 216-252-8158

with copies to: Ms. Sharon Schiller, Trademarks Counsel
White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111 Facsimile: 216-252-8158

and Mr. Allan R. Feldman
Leveraged Marketing Corporation of America
156 West 56th Street, Suite 1400
New York, New York 10019
Facsimile: 212-581-1461

and shall be deemed to have been given upon receipt.
<PAGE>

Page 23--

IN WITNESS WHEREOF, this Agreement is executed on the day and year
first written above.

White Consolidated Industries, Inc. (Licensor)

/S/ STANLEY R. MILLER
- ----------------------
By: Stanley R. Miller
Assistant Secretary

New M-Tech Corporation (Licensee)

/s/ Leonor Schuck
- -----------------
By: Leonor Schuck
Vice President, Finance
<PAGE>

EXHIBIT A

Portable consumer microwave ovens

<PAGE>

AMENDMENT 1

AGREEMENT BETWEEN

ELECTRONIC INDUSTRIES OF NORTH AMERICA

AND

WHITE CONSOLIDATED INDUSTRIES, INC.

DATED 15 SEPTEMBER 1997

ARTICLE 5
TERM OF AGREEMENT

5.1 CONTRACT TERM. The Contract Term of this Agreement commences on the
date first mentioned above and ends on December 31, 2003 at midnight Eastern
Standard Time unless sooner terminated pursuant to the terms of this Agreement.

ARTICLE 7
7.1 MINIMUM ROYALTY PAYMENTS. The minimum Royalties for the Contract
Term shall be paid one hundred twenty five thousand dollars ($125,000) in
advance on execution of this Agreement and the balance in twenty (20) equal
installments of $27,500 paid quarterly beginning March 30, 1999 and throughout
the remainder of the contract period. Each installment is due on or before the
30th day of each March, June, September and December. The Minimum Royalties for
each Extension Term as shown below shall be paid in four (4) equal installments
each by the 30th day of March, June, September and December of the respective
term.

EXCEPT AS HEREBY AMENDED, THE AGREEMENT ENTERED INTO AND EFFECTIVE 15
SEPTEMBER 1997 SHALL REMAIN IN FULL FORCE AND EFFECT.

SIGNED THIS DAY OF DECEMBER, 1997.

ELECTRONIC INDUSTRIES OF WHITE CONSOLIDATED INDUSTRIES, INC.
NORTH AMERICA

/s/ JOEL NEWMAN /s/ ILLEGIBLE
- ---------------------------------- -----------------------------------
By: By:

EXHIBIT 10.6
TRADEMARKS LICENSE AGREEMENT

AGREEMENT entered into as of September 15, 1997, by and between White
Consolidated Industries, Inc., a Delaware Corporation, having its principal
office at 11770 Berea Road, Cleveland, Ohio 44111 ("Licensor"), Electronic
Industries of America, Inc., a Florida Corporation, having its principal office
at 16550 N.W. 10th Avenue, Miami, Florida 33169 (hereinafter referred to as
"Licensee").

WHEREAS, Licensor is the owner of the Trademark Philco and associated designs
and trade dress (together, the "Trademarks"), and is using the Trademarks
throughout the World, and

WHEREAS, Licensor has the right to grant Licensee the license, right and
permission to use the Trademarks, and

WHEREAS, Licensee is in the business of manufacturing, distributing and selling
articles described and specified hereinafter (the "Products"), and desires to
secure the license, right and permission to use the Trademarks upon, and in
connection with, the manufacturing, distributing and selling of such Products;
and

WHEREAS, Licensor desires to grant to Licensee, and Licensee desires to accept
from Licensor, a license to use the Trademarks in the design, manufacture,
advertising, sale and promotion of the Products, subject to each of the terms,
provisions and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
covenants and provisions contained herein, the parties hereto do hereby agree as
follows:
<PAGE>
Page 2--

ARTICLE 1
GRANT OF LICENSE AND DESIGNATION OF TRADEMARKED PRODUCT

In the event of any disputes between the parties to this Agreement regarding the
definition of Trademarked Product, the final decision regarding such definition
shall rest in Licensor's sole and absolute discretion. The rights granted to
Licensee herein are limited to use on or in connection with the Trademarked
Product and Licensee specifically agrees not to use the Trademarks in any manner
or on any product, service or item, except as set forth in the Agreement.

ARTICLE 2
GEOGRAPHIC AREA

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LICENSOR

Page 3--

3.5 RIGHT TO GRANT LICENSE. Licensor has the full right, power and authority to
grant the license as set forth in Article 1 hereof.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LICENSEE

4.1 ORGANIZATION AND POWER. Licensee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Licensee
has all corporate power and authority to execute and deliver this Agreement and
perform its obligations hereunder. - 4.2 Authorization. The execution, delivery
and performance by Licensee of this Agreement and the consummation of the
transaction contemplated hereby has been duly and validly authorized by ail
requisite corporate action, and no other corporate act or proceeding on this
part of Licensee is necessary to authorize the execution, delivery and
performance of this Agreement and the consummation of the transaction
contemplated hereby.

Page 4--

ARTICLE 5
TERM OF AGREEMENT

5.2 EXTENSION TERMS. Licensor hereby grants to Licensee the option to extend the
term of this Agreement for up to six (6) two (2) year periods commencing as of
January 1, 2003 and ending on December 31, 2014, at midnight Eastern Standard
Time, unless sooner terminated pursuant to the terms of this Agreement with such
extended terms to be subject to the same terms and must achieve specified levels
of Minimum Sales during the then preceding Contract or Extension Term of this
Agreement as set forth in Article 8 hereof. Such options to extend the term of
this Agreement must be exercised by Licensee, if at all, by giving written
notice to Licensor at least one hundred and twenty (120) days prior to the
expiration of the then preceding Contract Term of this Agreement. Nine months
(270 days) prior to the end of the fourteenth extension, the parties will
negotiate, in good faith, the possibility of extending this Agreement for one or
more extension periods.

ARTICLE 6
ROYALTIES

6.1 EARNED ROYALTIES. Subject to of Article 7 hereof, Licensee shall pay to
Licensor for the rights granted hereunder a sum equal to one and [*****] of the
Net Invoice Value of Trademarked Products Sold by Licensee (the "Royalties").

The Royalties shall be remitted in accordance with Section 7.4 of this
Agreement.

6.2 DEFINITION OF NET INVOICE VALUE. As used throughout this Agreement, the term
"Net Invoice Value" shall mean the aggregate of the invoiced amounts of
Trademarked Product sold by Licensee, less (a) resumed goods, refunds, credits
and allowances actually made or allowed to customer with respect to Trademarked
Product, (b) freight or handling charges charged to customers or incurred on
resumed goods, and (c) sales and excise taxes actually paid ("NIV").

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 5--

ARTICLE 7
MINIMUM ROYALTY PAYMENTS

7.1A Licensee shall not be in default of this Paragraph if the minimum royalties
paid pursuant to a Trademark Licensee Agreement between White Consolidated
Industries and New M-Tech Corporation, of even date, and the royalties paid
pursuant to this Agreement equal the minimum royalty payments set forth below.

TERM YEAR(S) MINIMUM
- ---- ------- ROYALTIES
Contract ---------
Term 1997/2002 $1,350,000

7.2 INITIAL ROYALTY PAYMENT. Licensee shall pay Licensor an initial royalty
payment (the "Initial Royalty Payment") of [*****] upon execution of this
Agreement. The Initial Royalty Payment shall be applied against the first
Royalties payable pursuant to Section 7.4 of this Agreement.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>
Page 6--

7.5 In the event that during any of the Terms of the Agreement, the aggregate
retail sales of microwave ovens in the United States decreases from the prior
Term (the amount of such reduction of sales of microwave ovens in the United
States is hereinafter express as a percentage and the amount by which such
percentage exceeds [*****]% is hereinafter referred to as the to as the
"Reduction Percentage"), then the Minimum Sales Commitment for the Term
following the Prior Term (the "Adjustment Period") shall be reduced. This
reduction shall be in an amount (the "Reduction Amount") equal to (i) the higher
of (A) the Minimum Sales Commitment for the Adjustment Period or (B) the actual
sales by Newtech of microwave ovens during the Prior Term (the "Actual Prior
Term Sales") multiplied by (ii) the Reduction Percentage. The Reduction amount
will then be subtracted from the higher of (i) the Minimum Sales Commitment for
the Adjustment Period or (ii) the Actual Prior Term Sales, to determine the new
Minimum Sales Commitment for the Adjustment Term; provided, however that if this
computation yields an amount greater than the Minimum Sales Commitment for such
Term, then no adjustment shall be made. For purpose of this section, sales for
microwave ovens in the United States shall be determined by reference to
applicable information published in the most widely-circulated brace publication
containing such information; provided that if Licensor and Licensee are unable
to agree upon the publication from which such information is be derived, then
the applicable information shall be derived by reference to applicable
information shall be derived by reference to a trade publication selected by the
licensor and a trade publication selected by the licensee, and the applicable
sales information shall be determined on the basis of the average of the data
contained on the two publications.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 7--

ARTICLE 8
MINIMUM SALES OF TRADEMARKED PRODUCT

8.1A. Licensee shall not be in default of this Paragraph if The Minimum Sales
generated pursuant to a Trademark License Agreement between White- Consolidated
Industries and New M-Tech Corporation, of even date, and the minimum sales
generated pursuant to this Agreement equal the minimum sales set forth below.

Contract Term [*****]
First Extension Term [*****]
Second Extension Term [*****]
Third Extension Term [*****]
Fourth Extension Term [*****]
Fifth Extension Term [*****]
Sixth Extension Term [*****]

ARTICLE 9
ADVERTISING AND ART WORK

9.2 ART WORK. Licensor shall make available to Licensee any and ail necessary
film, photostats, artwork and full color reproductions of its Trademarks,
artwork, designs and other materials necessary for Licensee's use in accordance
with this Agreement.
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 8--

ARTICLE 10
LICENSEE'S RECORDS

ARTICLE 11
LICENSEE'S ANNUAL REPORTS AND ANNUAL ROYALTY PAYMENTS

On or before the fifteenth (1Sth) day of the second (2nd) month following the
end of Licensee's fiscal year, Licensee shall render to Licensor a statement
certified by Licensee's Chief Financial Officer disclosing gross and NIV Value
of sales, Royalties due and Royalties paid for Licensee's preceding fiscal year,
and for any Contract or Extension Term which ended within said fiscal year. If
said statement discloses that the amount of Royalties paid during any period to
which said statement relates was less than the amount required to be paid under
the provisions of this Agreement, Licensee shall pay said deficiency concurrent
with the delivery of the statement. If said statement discloses the Licensee has
paid Royalties in excess of the amounts required to be paid, Licensor shall
apply said excess to the next Royalty payment.
<PAGE>

Page 9--

ARTICLE 12
AUDIT BY LICENSOR

At all times during the existence of this Agreement and for twelve (12) months
after the last report is rendered hereunder, Licensor, if it so chooses, may
cause its independent accountants to audit all books and records of Licensee
pertaining Trademarked Product. Licensor shall have the further right to engage
an independent certified public accounting firm, to audit the books and records
of Licensee with regards to the Royalties due hereunder. In the event any such
audit shall disclose that the Licensee has understated NIV Sales or underpaid
Royalties for any reporting period, Licensee shall forthwith and upon written
demand of Licensor, pay the amount, if any, by which the Royalties owing exceed
Royalties paid, plus interest of twelve percent (12%) per annum on such
delinquent amounts, accruing from the date on which such amounts became
delinquent to the date on which such delinquent amounts were paid. In the event
that Licensee has understated NIV Sales and consequently has underpaid Royalties
in excess of One Thousand dollars ($1,000) of amount due for any Contract Term,
Licensee shall forthwith and upon written demand also pay all costs, fees and
expenses incurred by Licensor in conducting such audit, including, without
limitation, reasonable travel expenses. Should such audit disclose that the
Royalties paid exceed the Royalties due, any excess revealed by such audit will
be remitted to Licensee.

ARTICLE 13
LICENSEE OBLIGATIONS

13.1 LICENSEE DILIGENCE. Licensee shall design, manufacture, advertise, sell and
ship the Trademarked Product and shall continuously and diligently during the
term hereof procure and maintain facilities and trained personnel sufficient and
adequate to accomplish the foregoing, all to the extent and in a manner no less
thorough, diligent and professional than the same accorded by Licensee for
Licensee's most favored premium products and/or services. A cessation of the
above for a continuous period of ninety (90) days shall be grounds for
termination by Licensor, without notice. The marketing of Trademarked Product
shall be conducted in a manner consistent with enhancing the long-term value of
the Trademarks. It is the interest of the parties that Trademarked Product be
sold simultaneously through a wide range of retailers. Accordingly, Licensee
shall continuously and diligently design, price and promote Trademarked Product
to retailers in all major classes of trade including department stores (i.e.,
Macy's, Burdine's, Bloomingdale's, etc.), mass merchants (i.e., Walmart, Kmart,
etc.), regional discounters (i.e., Caldor, Bradlees, etc.), warehouse clubs
(i.e., Target, Sam's, etc.), specialty electronics chains (i.e., The Wiz, etc.),
mail order, premium and television shopping services. Licensee shall exhibit
Trademarked Product in exhibit or booth space at the annual electronics show.
<PAGE>
Page 10--

13.4 FORFEITURE OF TRADEMARK FOR NON-USE. Licensee's failure to ship
Trademarked Product Trademark by December 31, 1998 shall be deemed a forfeiture
of its grant to use the Trademarks. Failure of Licensee to ship Trademarked
Product for a period of one (1) year shall be deemed a forfeiture of its grant
to use the Trademarks.

1) Licensee is in default under the provisions of any line of credit or debt
agreement with financing institution.

2) A sale or transfer of Licensee's assets which, in Licensor's opinion, may
affect the ability of Licensee to operate the business pursuant to this
Agreement, or

3) Licensee incurs net operating losses in the aggregate for three or more
consecutive years.

ARTICLE 14
APPROVALS AND QUALITY STANDARDS

14.1. ADVANCE APPROVAL. Prior to any use of any Trademarks, Licensee shall, at
Licensee's expense, submit to Licensor, for Licensor's written approval, the
following: (a) two (2) specimens of each Product on which the Trademarks is to
appear (the "Specimens"); (b) all artwork which Licensee intends to use in
connection with the Trademarks; and (c) all packaging, advertising and
promotional literature which Licensee intends to use in the marketing or
merchandising of the Trademarked Product. Licensor shall give Licensee written
notice of approval or disapproval within ten (10) business days from its receipt
of the Specimens, and should Licensor disapprove, its written notice shall

<PAGE>
Page 11--

explain in detail the reasons for disapproval so that Licensee may prepare and
submit new Specimens and/or samples.

14.6 PERIODIC REVIEW MEETINGS. Licensee will conduct periodic meetings with
Licensor to review Licensee's progress and performance under the terms of this
Agreement.

ARTICLE 15
RESTRICTIONS UPON SUBCONTRACTS

<PAGE>
Page 12--

ARTICLE 16
ASSIGNMENT; TRANSFERS; SUBLICENSE

The parties hereby acknowledge the substantial personal service nature of
Licensee's obligations hereunder. Therefore, without the prior written consent
of Licensor, which consent will not be unreasonably be withheld, Licensee shall
not voluntarily or by operation of law assign or transfer this Agreement or any
of Licensee's rights or duties hereunder or any interest of Licensee herein, nor
shall Licensee enter into any sublicense for the use of the Trademarks by.
others. Any assignment, transfer or sub-license without Licensor's written
consent shall be void and at the option of the Licensor shall constitute a
default hereunder. For purposes of this Article 16, the failure of Windmere
Corporation, a Florida Corporation, having its principal offices at 5980 Miami
Lakes Drive, Miami Lakes, Florida, 33014, and Joel Newman, President of
Electronic Industries of America, Inc. (Licensee) to maintain ownership of at
least 51% of the outstanding voting stock of Licensee shall be deemed an
attempted assignment of this Agreement, unless Licensee has made a public
offering of its voting stock in which ease Electronic Industries of America,
Inc. and Windmere need not retain 51% of the voting stock.

ARTICLE 17
NO DILUTION OF TRADEMARKS OR ATTACK UPON TRADEMARKS

<PAGE>
Page 13--

ARTICLE 18
INFRINGEMENT AND OTHER TRADEMARKS LITIGATION

18.1 TRADEMARKS DEFENSE. Licensee shall apprise Licensor immediately upon
discovery of any possible infringement of the Trademarks which comes to the
attention of the Licensee. Licensor, at its sole cost and expense, and in its
own name, may prosecute and defend any action or proceeding which Licensor deems
necessary or desirable to protect the Trademarks, including but not limited to
actions or proceedings involving their infringement. Upon written request by
Licensor, Licensee shall join Licensor at Licensor's sole expense in any such
action or proceeding. However, Licensee shall not commence any action or
proceeding to protect the Trademarks or any action or proceeding alleging
infringement thereof without the prior written consent of Licensor. Licensee may
prosecute and defend, at its sole expense and in its own name, any action or
proceeding to protect its designs or styles. Any and all damages recovered in
any action or proceeding commenced by Licensor shall belong solely and
exclusively to Licensor.

ARTICLE 19
ADDITIONAL RESTRICTIONS UPON USE OF TRADEMARKS

19.1 IDENTIFICATION OF TRADEMARKED PRODUCT. It is the intention of the parties
hereto and the purpose of this Article 19 that all of the Trademarked Product be
identified to the general public by the Trademarks. Licensee shall use a
registration indicator in the form of a cirded-R or "TM" symbol in conjunction
with the Trademarks when so instructed by the Licensor. Licensee further agrees
to assist Licensor in obtaining registrations for the Trademarks in the event
any Trademarks is not yet registered for the Trademarked Product. Licensee shall
use notice language in the manufacture, sale, advertising or other promotion of
the Trademarked Product as follows: or "Philco is a registered Trademark of
White Consolidated Industries, Inc. and is used under license" or other such
language
as a Licensor designates in writing.

ARTICLE 20
DEFAULTS BY LICENSEE

20.1 DEFAULTS. Except as otherwise expressly provided in this Agreement, in the
event Licensee shall default in the performance of any of the terms, conditions
or obligations to be performed by Licensee hereunder, and if such default
involves the payment of money and same shall not be cured within ten (10) days
after Licensor gives written notice to Licensee of such default, or if such
default involves performance other than the payment of money and the same is not
cured within fifteen (15) days after Licensor gives written notice to Licensee
of such default, then and in any such event, Licensor may immediately and
without prior notice terminate this Agreement and all of the rights and
obligations hereunder (except as otherwise expressly provided by this
Agreement). In the event that a Receiver is appointed to, or one or more
auditors take possession of all, or substantially all, of the assets of the
Licensee, or if Licensee shall make a general assignment for the benefit of
creditors, or if any action is taken or suffered by Licensee under any state or
Federal insolvency or bankruptcy act, then this Agreement and all of the rights
and obligations hereunder (except as otherwise expressly provided by this
Agreement) shall immediately, and without notice or need of any further action
by any party hereto, terminate.

<PAGE>
Page 15--

ARTICLE 21
LICENSOR'S RIGHTS TO DESIGNS, ETC., UPON TERMINATION

21.1 RIGHTS UPON TERMINATION. In the event this Agreement is terminated for any
reason, or expires according to its terms, Licensee shall assign, transfer and
transmit to Licensor any and all rights of Licensee in the Trademarks, including
associated goodwill, and shall not thereafter manufacture, sell or use the
Trademarks in any manner; provided that, Licensee may however, dispose of its
stock of Trademarked Product on hand within [*****] after the termination of
this Agreement; provided, however, all sums due to Licensor have first been
paid; and, further provided, that Licensee shall, prior to the effective date of
said termination, deliver to Licensor a detailed schedule of all inventory of
Trademarked Product in Licensee's possession (constructive or otherwise). After
the expiration of the aforesaid [*****] period, Licensee shall destroy all
Trademarked Product and packaging and promotional material remaining in
Licensee's possession which are identified in any manner by or with the
Trademarks. Notwithstanding the above, Licensor shall have the right to purchase
such excess stock of Trademarked Product, in whole or in part, prior to any sale
or offer of sale by Licensee to any third party, for an amount equal to the
wholesale cost of such Trademarked Product. It is specifically understood and
agreed that the Licensee's right to dispose of stock shall be conditioned upon
the absence of harm to the Trademarks and/or the reputation of the Licensor
arising from the Licensee's use of the Trademarks, as determined by the Licensor
in its sole discretion.

21.2 CONTINUATION OF AGREEMENT TERMS. Licensee shall continue to abide by the
terms of this Agreement with respect to such Trademarked Product during the
period in which disposition pursuant to Article 21.1 of this Agreement is taking
place. Neither Licensee nor any creditor judgment or otherwise), assignee,
transferee, trustee, or receiver of Licensee, or similar person or officer, or
purchaser other than in the regular course of Licensee's business may sell or
transfer any Trademarked Product until and unless all sums due Licensor from
Licensee have been paid. Further, upon termination of this Agreement, all
labels, signs, packages, wrappers, cartons, circulars, advertisements, and other
items bearing or containing any reproduction or representation of any of the
Trademarks shall automatically and without cost to Licensor become the property
of Licensor, and Licensee shall immediately deliver the same to Licensor's place
of business or other location designated by Licensor. The reasonable cost of
such delivery shall be paid by the Licensor.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>

Page 16

21.5 SURVIVAL OF TERMS. The provisions of this Article 21 shall survive the
termination (or expiration) of this Agreement.

ARTICLE 22
ADDITIONAL RIGHTS PRIOR TO TERMINATION

During the final Contract Year of the Term, hereof, Licensor shall have the
right to design and manufacture merchandise of the types covered by this
Agreement and to negotiate and conclude such Agreements as it desires pursuant
to which it may grant licenses to any party or parties of any or all of the
rights herein granted to Licensee; provided, however, that no merchandise herein
identified as Trademarked Product shall be shipped by Licensor or any third
party other than Licensee prior to the expiration or termination of this
Agreement (exclusive of the additional [*****] period for the disposition of the
Trademarked Product as provided in Article 21 hereof).

ARTICLE 23
GOODWILL

Licensee acknowledges and recognizes that the Trademarks are of substantial
significance and value to Licensor and that said Trademarks have acquired
valuable secondary meaning, value and goodwill. Except as may be otherwise
specified in this Agreement; Licensee shall not use any of the Trademarks or any
name or symbol similar thereto as part of its name or symbol or as part of the
name or symbol of any corporation, partnership, joint venture, proprietorship or
other entity or person which it controls or with which it is affiliated.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>
Page 17--

ARTICLE 24
INSURANCE

ARTICLE 25
AGENTS, FINDERS AND BROKERS

Each of the parties to this Agreement shall be responsible for the payment of
any and ail agent, brokerage and/or finder commissions, fees and related
expenses incurred by it in connection with this Agreement or the transactions
contemplated hereby and shall indemnify the other and hold it harmless from any
and all liability (including, without limitation, reasonable attorney's fees and
disbursements paid or incurred in connection with any such liability) for any
agent, brokerage and/or finder commissions, fees and related expenses claimed by
its agent, broker or finder, if any, in connection with this Agreement or the
transactions contemplated hereby. Licensor's sole agent/finder/broker in
connection with this Agreement is Leveraged Marketing Corporation of America
("LMCA") with offices at 156 West 56th Street, New York, New York 10019. Any
and all commissions, fees and/or other monies due LMCA in connection with this
Agreement shall be borne exclusively by Licensor as per the Agency Agreement of
March 1, 1995.

ARTICLE 26
RESERVED RIGHTS

Rights not herein specifically granted to Licensee are reserved by Licensor and
may be used by Licensor without limitation. Any use by Licensor of such reserved
rights, including but not limited to the use or authorization of the use of any
Trademarks in any manner whatsoever not inconsistent with Licensee's right
hereunder, shall not be deemed to be interference with or infringement of any of
Licensee's rights.

CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.

<PAGE>
Page 18--

ARTICLE 27
APPLICABLE LAW

ARTICLE 28
NON-AGENCY OF PARTIES

ARTICLE 29
AMENDMENTS AND WAIVERS BY LICENSOR

This Agreement may be amended or modified by Licensor, and Licensor may waive
any of its rights hereunder or performance by Licensee of any of its obligations
hereunder, only by instrument in writing. In the event Licensor shall at any
time waive any of its rights under this Agreement or the performance by Licensee
of any of its obligations hereunder, such waiver shall not be construed as a
continuing waiver of the same rights or obligations, or a waiver of any other
rights or obligations.
<PAGE>
Page 19--

ARTICLE 30
ENTIRE AGREEMENT

This Agreement constitutes the entire Agreement between the parses as to the
Trademarked Products, and supersedes all prior agreements and understandings
relating to this subject matter hereof.

ARTICLE 31
SEPARABILITY OF PROVISIONS

If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provisions shall be fully
severable. The Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provisions had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of- such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid or enforceable.

ARTICLE 32
COUNTERPARTS; HEADINGS

ARTICLE 33
BINDING EFFECT

ARTICLE 34
INDEMNIFICATION BY LICENSEE

(a) the actual or alleged unauthorized use in connection with, or arising out
of, a Trademarked Product of any Trademarks (including, without limitation, the
Trademarks), patent, process, method or device;
(b) the actual or alleged infringement in such connection of any copyrights,
trade name or patent or any act held to constitute libel, slander or defamation;
(c) the invasion by Licensee of the right of privacy, publicity, or other
property right;
(d) the failure to perform of, or any defect in, or use of, the Trademarked
Product, including without limitation any injuries to the person or to property
arising therefrom;
(e) the infringement or breach of other personal or property right of any
person, firm or corporation by Licensee, its officers, employees, agents, or
anyone directly or indirectly acting by, through, on behalf of, or pursuant to
contractual or any other relationship with Licensee; and
(f) Licensee's sales and/or promotional efforts.

34.2 LICENSEE INDEMNIFIED PARTIES; BASIC INDEMNIFICATION. For purpose of this
Section "Licensee Indemnification Parties" refers to Licensee and officers,
directors, employees and agents of Licensee. Licensor shall indemnify and hold
harmless the Licensee Indemnified Parties and each of them from and against the
cost and expenses (including, without limitation, reasonable attorneys fees and
costs) of any and all claims, suits, losses, damages, costs, demands,
obligations, investigations, causes of action, and judgements arising out of any
assertion or allegation by any persons, entities of government agencies that any
Trademark infringes any trademark, trade name or any other personal or property
right of a third parry.

insulate the Indemnified Parties from any and all product liability claims
arising from the use or misuse of the Trademarked Product.

34.4 SURVIVAL OF TERMS. The provisions of this Article 34 shall survive the
termination (or expiration) of this Agreement.

ARTICLE 35
INFORMATION

35.1 CONFIDENTIALITY. Licensor and Licensee may from time to time disclose to
each other sales, engineering, applications, drawing, designs and any other
knowledge, information, techniques, know-how or data pertaining to the
manufacture, use, application, marketing, distribution and sales of the
Trademarked Product or other products of Licensor or Licensee (the
41nformabon~). Each par~ hereto shall hold in confidence all such data and
information and shall not disclose such data and information except to such
personnel and employees as are necessary for the effective performance of this
Agreement or as otherwise permitted by this Agreement. Licensor and Licensee
shall cause all data, documents or other written or printed materials embodying
the Information to be plainly marked to indicate the secret and confidential
nature thereof and to prevent unauthorized access thereto, or reproduction or
use thereof. Licensor and Licensee shall take any necessary action, including
court proceedings, to comply and to compel compliance with the provisions of
this Article 35. The obligations undertaken by Licensor and Licensee pursuant to
this Article 35 shall not apply to any such data or information which is or
becomes published or otherwise generally available to the public without fault
of a party hereto or is otherwise lawfully acquired by a party hereto and such
obligations shall, as so limited, survive the expiration or termination of this
Agreement. Upon termination of this Agreement, either Party hereto may request
the prompt return of all written materials received from the other Party
including originals, copies, extractions, translations and reproductions
thereof. This Agreement is not intended to and shall not be construed to give
either Party any vested right, title or interest in the Trademarked Product or
the Information.

35.3 SURVIVAL OF TERMS. The provisions of this Article 35 shall survive the
termination of this Agreement.
<PAGE>

ARTICLE 26
PUBLIC ANNOUNCEMENTS

ARTICLE 37
ADDRESSES FOR NOTICE

All notices, statements, consents, instructions or other documents required or
authorized to be given hereunder shall be in writing, and shall be delivered
personally to an officer, partner or authorized representative of the other
party of by certified mail, return receipt requested, addressed to the parties
concerned as follows:

to Licensee Electronic Industries of America, Inc.
16550 N.W. 10th Avenue
Miami, Florida 33168
Facsimile: 305-624-8901

and to Licensor at: White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111
Facsimile: 216-252-8158

with copies to: Ms. Sharon Schiller, Trademarks Counsel
White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111 Facsimile: 216-252-8158

and Mr. Allan R. Feldman
Leveraged Marketing Corporation of America
156 West 56th Street, Suite 1400
New York, New York 10019
Facsimile: 212-581-1461

and shall be deemed to have been given upon receipt.

<PAGE>

IN WITNESS WHEREOF, this Agreement is
executed on the day and year first written above.

White Consolidated Industries, Inc. (Licensor)

/s/ Daniel R. Elliott
- ---------------------
By: Daniel R. Elliott
Senior Vice President,
General Counsel

New M-Tech Corporation (Licensee)

/s/ Leonor Schuck
- -------------------
By: Leonor Schuck
Vice President, Finance
<PAGE>
EXHIBIT A

Portable consumer microwave ovens

<PAGE>

AMENDMENT 1

AGREEMENT BETWEEN

ELECTRONIC INDUSTRIES OF NORTH AMERICA

AND

WHITE CONSOLIDATED INDUSTRIES, INC.

DATED 15 SEPTEMBER 1997

ARTICLE 5
TERM OF AGREEMENT

EXCEPT AS HEREBY AMENDED, THE AGREEMENT ENTERED INTO AND EFFECTIVE 15
SEPTEMBER 1997 SHALL REMAIN IN FULL FORCE AND EFFECT.

SIGNED THIS DAY OF DECEMBER, 1997.

ELECTRONIC INDUSTRIES OF WHITE CONSOLIDATED INDUSTRIES, INC.
NORTH AMERICA

/s/ JOEL NEWMAN /s/ ILLEGIBLE
- ---------------------------------- -----------------------------------
By: By:

EXHIBIT 10.34

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated as of April 15,
1998, by and between Newtech Electronics Industries, Inc. (f/k/a New M-Tech
Corporation), a Florida corporation, with its principal place of business at
16550 N.W. 10th Avenue, Miami, Florida 33169 (the "Company"), and Joel Newman
("Executive").

RECITALS

WHEREAS, Executive is the Chairman, Chief Executive Officer and
President of the Company and has continuously served as a valuable employee of
the Company since its inception.

WHEREAS, of the contributions made by all of the Company's employees
and officers, Executive's leadership, creativity, loyalty and services have
constituted major factors in the extraordinarily successful growth and
development of the Company.

WHEREAS, the Company desires to continue such employment upon certain
terms and conditions. All of the terms, conditions and undertakings of this
Agreement (including, without limitation, Section 8 hereof) were submitted to
and duly approved and authorized in writing by the Company's Board of Directors.

WHEREAS, the Company intends to file with the Securities and Exchange
Commission a Registration Statement on Form S-1 with respect to the Company's
proposed underwritten initial public offering of Common Stock (the "Offering").

NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements of the parties contained herein, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and Executive hereby agree as follows:

AGREEMENT

1. EMPLOYMENT. Executive shall be employed as the Chairman, Chief
Executive Officer and President of the Company.

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then in effect. The "Anniversary Date," as used herein, shall be the first day
of the second year of the Term and the first day of each subsequent year,
including each year beyond the first two years of the Term. It is the intention
of the parties that the Term as of each Anniversary Date automatically shall be
two years, that at least two years' written notice shall be required to
terminate this Agreement, except as otherwise provided in Sections 6, 7 and 13,
and except for termination for cause, and that said written notice to terminate
may only be given on, or not more than 60 days prior to, an Anniversary Date.

3. DUTIES. During the Term, Executive shall use his best efforts and
devote a sufficient amount of his working time and attention to the affairs of
the Company in order to perform the duties of the Chairman, Chief Executive
Officer and President of the Company. Executive shall report directly to the
Board of Directors of the Company (the "Board") and shall perform such
reasonable tasks and carry out such reasonable responsibilities as the Board
shall assign or designate.

4. COMPENSATION. During the Term of this Agreement, the Company shall
compensate Executive as follows:

(a) SALARY. The Company shall pay Executive a base annual
salary of $475,000, to be distributed in equal bi-weekly installments (the "Base
Annual Salary"). The Base Annual Salary shall commence on the Commencement Date
and shall remain in effect for the next consecutive twelve months of the Term.
Thereafter, the Base Annual Salary will increase progressively for each of the
ensuing twelve-month periods ("Fiscal Year") during the Term by an amount at
least equal to the percentage increase in the Miami-Dade County Consumer Price
Index published by the Bureau of Labor Statistics, United States Department of
Labor (the "Index") for the twelve-month period beginning three months before
the beginning of each such Fiscal Year. If at any time at which the
determination of the Base Annual Salary adjustment is required the Index is no
longer published or issued, the parties shall use such other index as is then
generally recognized or accepted for similar determinations of purchasing power.
If the parties are unable to agree on the selection of an index which would most
accurately carry out the intent hereof, or if there is a dispute with respect to
any computations as called for herein, then the issue with respect thereto shall
be determined by arbitration according to the then existing rules of the
American Arbitration Association. Nothing contained herein shall be construed to
prevent the Company from increasing Executive's Base Annual Salary more often
than annually or by a higher amount than required by the Index.

(b) AUTOMOBILE. The Company shall provide Executive with a new
automobile approximately every three years, of make and model comparable to the
automobile which Employee is accustomed to driving, and the Company shall bear
the cost of such automobile and all fuel, maintenance and insurance costs
associated with such automobile.

(c) EMPLOYEE BENEFITS. Executive shall participate in the
Company's 1997 Stock Option Plan and all other insurances, or insurance plans,
and employee benefits and bonuses covering the Company's senior executive
officers as are now or may in the future be in effect. Employee shall be
accorded at least the same level of insurance benefits and coverage, both as to
types and amounts, as he has been accorded for the three months immediately

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<PAGE>

preceding the date hereof, and the Company shall bear the full cost of providing
such insurance coverage.

(d) EXPENSES. The Company shall reimburse Executive for all
reasonable expenses incurred by him in the course of conducting his duties
hereunder.

(e) VACATION. Executive shall be entitled to a minimum of four
weeks paid vacation per year.

(f) ADDITIONAL COMPENSATION. Notwithstanding anything to the
contrary contained in this Agreement, Executive shall be entitled to all
benefits, including bonuses, paid or given by the Company to executive officers
of the Company during the Term, and nothing contained in this Agreement shall in
any way be deemed to limit Executive's receipt of or participation in such
benefits, bonuses or benefit plans or to preclude the Company from making
additional payments, in the form of bonuses or otherwise, or conferring
additional benefits upon Executive.

5. RESTRICTIONS. During the term of this Agreement, Executive shall not
use, disclose, confirm, furnish or make accessible to anyone, other than in the
regular course of business of the Company, any knowledge or information of a
confidential or secret nature with respect to the business affairs, assets,
operations, plans or know-how of the Company or its subsidiaries or affiliates.

6. DEATH. If Executive shall die during the Term of this Agreement,
the Term shall terminate on the date thereof, and the Company shall pay
Executive's estate a sum equivalent to one year's Base Annual Salary, as
adjusted pursuant to Section 4(a) above. Such payment shall be paid within 90
days of Executive's death and shall be in addition to any life insurance
benefits payable as the result of Executive's death.

7. DISABILITY. If during the Term Executive is unable to perform the
essential duties of his position, with or without reasonable accommodation, by
reason of illness or incapacity, for a period of 360 consecutive days or more,
the Company may, at its option, upon written notice to Executive, terminate this
Agreement, which termination shall be effective one year from the date of such
written notice. Such termination, however, shall not affect any rights of
Executive to insurance payments due to Executive as a result of the insurance
coverage provided for in Paragraph 4(c). Determination of whether Executive is
disabled shall be determined in accordance with the Company's long-term
disability plan.

8. CHANGE IN CONTROL. This Agreement shall continue in full force and
effect notwithstanding any change in control, merger, consolidation or
reorganization of any kind involving the Company or the sale of all or
substantially all of its assets. It shall be binding upon the Company and
Executive and their respective heirs, executors, administrators, successors and
assigns.

Notwithstanding anything to the contrary contained herein, in
the Company's 1997 Stock Option Plan or the related stock option agreements or
in any of the Company's other

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stock option plans, incentive compensation plans or similar plans or in the
related agreements between the Company and Executive from time to time, if at
any time during the Term there shall be a change in control of the Company, then
Executive shall have the option of terminating this Agreement immediately upon
notice and, in such event: (i) any stock option of the Company granted to
Executive shall be exercisable immediately and the stock of the Company acquired
pursuant to such exercise may be sold by Executive subject to no restrictions by
the Company whatsoever (other than those imposed by federal and state securities
laws); and (ii) the Company shall pay to Executive, at the time of such
termination, a lump sum equal to three times Executive's Base Annual Salary,
adjusted pursuant to Section 4(a) above for the fiscal year in which such
termination occurs. The Company's execution of this Agreement constitutes the
determination in writing of its Board of Directors to provide for the
acceleration of vesting of Executive's stock options pursuant to Section 8(b) of
the Company's 1997 Stock Option Plan and Section 10 of any Stock Option Grant
thereunder. For purposes of this Agreement, a "change in control" shall mean:

(a) (i) (A) The acquisition (other than by
or from the Company), at any time after the date hereof, by any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of
either the then outstanding shares of Common Stock or the combined voting power
of the Company's then outstanding voting securities entitled to vote generally
in the election of Directors, which acquisition has not been approved by the
Board; or

(B) Approval by the shareholders of the
Company of (x) a reorganization, merger or consolidation with respect to which
persons who were the shareholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 50% of the combined voting power entitled to vote generally in the election
of Directors of the reorganized, merged or consolidated company's then
outstanding voting securities, (y) a liquidation or dissolution of the Company
or (z) the sale of all or substantially all of the assets of the Company, unless
the approved reorganization, merger, consolidation, liquidation, dissolution or
sale is subsequently abandoned, which transaction has not been approved by the
Board; AND

(ii) Such change in control results in a diminution
in Executive's compensation, responsibilities or position such that Executive
cannot in good faith continue to fulfill the responsibilities for which he is
employed, as determined by Executive in his sole discretion, and if such change
in control did not occur due to Executive's intentional bulk sale of voting
shares of the Company owned by him directly to such control persons or group; OR

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<PAGE>

connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board.

Such lump sum payment shall be in lieu of any and all
compensation due to Employee for the years that would otherwise be remaining in
the Term pursuant to Paragraph 2. Upon receipt of said lump sum payment, this
Agreement and all rights and duties of the parties shall be terminated, except
as follows. In consideration for such lump sum payment and for the right to
terminate under the conditions set forth above, Executive agrees to consult with
the Company and its officers if requested to do so for a period of at least
three years from the date of such termination. However, Executive shall be
required to devote only such part of his time to such services as Executive
believes reasonable in Executive's sole discretion, and the time and date such
services are offered shall be determined by Executive so long as that time and
date is within a reasonable period of time after the request. It is expressly
agreed that the Company's rights to avail itself of the advice and consultation
services of Executive shall at all times be exercised in a reasonable manner,
that adequate notice shall be given to Executive in such events, and that
noncompliance with any such request by Executive for good cause, including, but
not limited to, ill health, prior commitments, conflicts of interest or absence
from Miami-Dade County, Florida, shall not constitute a breach or violation of
this Agreement. Executive agrees that, except for reimbursement of all
reasonable expenses incurred by him with respect to such consultation and
advisory services, payable as such consultation and advisory services are
rendered, he shall not be entitled to any further compensation. It is understood
that in furnishing any advisory and consulting services provided herein,
Employee shall not be an employee of the Company but shall act in the capacity
of an independent contractor.

9. WAIVERS. It is understood that either party may waive the strict
performance of any covenant or agreement made herein; however, any waiver made
by either party hereto must be duly made in writing in order to be considered a
waiver, and the waiver of one covenant or agreement shall not be considered a
waiver of any other covenant or agreement unless specifically stated in writing
as aforementioned.

10. SAVINGS PROVISION. The invalidity, in whole or in part, of any
covenant or restriction, or any section, subsection, sentence, clause, phrase or
word, or other provisions of this Agreement, as the same may be amended from
time to time, shall not affect the validity of the remaining portions thereof.

11. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Florida.

12. NOTICES. If either party desires to give notice to the other in
connection with any of the terms and provisions of this Agreement, such notice
must be in writing and given by personal delivery or by Federal Express, UPS or
other similar courier service, to the recipient at the address set forth below
and shall be deemed effective upon receipt.

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<PAGE>

If to the Company: Newtech Electronics Industries, Inc.
16550 N.W. 10th Avenue
Miami, Florida 33169

If to Executive: Joel Newman
355 Ocean Boulevard
Golden Beach, Florida 33161

13. DEFAULT. In the event either party defaults in the performance of
its obligations under this Agreement, the nondefaulting party may, after giving
30 days notice to the defaulting party to provide a reasonable opportunity to
cure such default, proceed to protect its rights by suit in equity, action at
law, or, where specifically provided for herein, by arbitration, to enforce
performance under this Agreement or to recover damages for breach thereof,
including all costs and attorneys' fees, whether settled out of court,
arbitrated or tried (at both trial and appellate levels).

14. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.

(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (a "Payment"), would be nondeductible by the Company for Federal
income tax purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), then the aggregate present value of amounts
payable or distributable to or for the benefit of Executive pursuant to this
Agreement (such payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be nondeductible by the Company because of Section 280G of the Code.
Anything to the contrary notwithstanding, if the Reduced Amount is zero and it
is determined further that any Payment which is not an Agreement Payment would
nevertheless be nondeductible by the Company for Federal income tax purposes
because of Section 280G of the Code, then the aggregate present value of
Payments which are not Agreement Payments shall also be reduced (but not below
zero) to an amount expressed in present value which maximizes the aggregate
present value of Payments without causing any Payment to be nondeductible by the
Company because of Section 280G of the Code. For purposes of this Section 14,
present value shall be determined in accordance with Section 280G(d)(4) of the
Code.

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<PAGE>

to time) or such earlier time as is requested by the Company and an opinion to
Executive that he has substantial authority not to report any excise tax on his
Federal income tax return with respect to any Payments. Any such determination
by the Accounting Firm shall be binding upon the Company and Executive.
Executive shall determine which and how much of the Payments shall be eliminated
or reduced consistent with the requirements of this Section 14, provided that,
if Executive does not make such determination within ten (10) business days of
the receipt of the calculations made by the Accounting Firm, the Company shall
elect which and how much of the Payments shall be eliminated or reduced
consistent with the requirements of this Section 14 and shall notify Executive
promptly of such election. Within five (5) business days thereafter, the Company
shall pay to or distribute to or for the benefit of Executive such amounts as
are then due to Executive under this Agreement. All fees and expenses of the
Accounting Firm incurred in connection with the determinations contemplated by
this Section 14 shall be borne by the Company.

(c) As a result of the uncertainty in the application of
Section 280G of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Payments will have been made by
the Company which should not have been made ("Overpayment") or that additional
Payments which will not have been made by the Company could have been made
("Underpayment"), in each case consistent with the calculations required to be
made hereunder. In the event that the Accounting Firm, based upon the assertion
of a deficiency by the Internal Revenue Service against Executive, which the
Accounting Firm believes has a high probability of success, determines that an
Overpayment has been made, any such Overpayment paid or distributed by the
Company to or for the benefit of Executive shall be treated for all purposes as
a loan AB INITIO to Executive which Executive shall repay to the Company
together with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to
have been made and no amount shall be payable by Executive to the Company if and
to the extent such deemed loan and payment would not either reduce the amount on
which Executive is subject to tax under Section 1 and Section 4999 of the Code
or generate a refund of such taxes. In the event that the Accounting Firm, based
upon controlling precedent or other substantial authority, determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.

* * * *

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Company and Executive have signed this
Agreement as of the day and year first above written.

NEWTECH ELECTRONICS INDUSTRIES, INC.

By:/S/ LEONOR SCHUCK
---------------------------------
Name: Leonor Schuck
Title: Vice President, Finance and
Chief Financial Officer

EXECUTIVE:

/S/ JOEL NEWMAN
---------------------------------------
Joel Newman

EXHIBIT 10.35

EMPLOYMENT AGREEMENT

RECITALS

WHEREAS, Executive is the Senior Vice President, Design and Product
Development of the Company.

AGREEMENT

1. EMPLOYMENT. Executive shall be employed as the Senior Vice
President, Design and Product Development of the Company.

<PAGE>

Agreement at the end of the two-year term then in effect. The "Anniversary
Date," as used herein, shall be the first day of the second year of the Term and
the first day of each subsequent year, including each year beyond the first two
years of the Term. It is the intention of the parties that the Term as of each
Anniversary Date automatically shall be two years, that at least two years'
written notice shall be required to terminate this Agreement, except as
otherwise provided in Sections 6, 7 and 14, and except for termination for
cause, and that said written notice to terminate may only be given on, or not
more than 60 days prior to, an Anniversary Date.

3. DUTIES. During the Term, Executive shall use his best efforts and
devote all of his working time and attention to the affairs of the Company in
order to perform the duties of the Senior Vice President, Design and Product
Development of the Company. Executive shall report directly to the Chief
Executive Officer and President of the Company and shall perform such reasonable
tasks and carry out such reasonable responsibilities as the Company's Board of
Directors (the "Board") or the Chief Executive Officer and President shall
assign or designate.

4. COMPENSATION. During the Term of this Agreement, the Company shall
compensate Executive as follows:

(a) SALARY. The Company shall pay Executive a base annual
salary of $192,000, to be distributed in equal bi-weekly installments (the "Base
Annual Salary"). The Base Annual Salary shall commence on the Commencement Date
and shall remain in effect for the next consecutive twelve months of the Term.
Thereafter, the Base Annual Salary will increase progressively for each of the
ensuing twelve-month periods ("Fiscal Year") during the Term by an amount at
least equal to the percentage increase in the Miami-Dade County Consumer Price
Index published by the Bureau of Labor Statistics, United States Department of
Labor (the "Index") for the twelve-month period beginning three months before
the beginning of each such Fiscal Year. If at any time at which the
determination of the Base Annual Salary adjustment is required the Index is no
longer published or issued, the parties shall use such other index as is then
generally recognized or accepted for similar determinations of purchasing power.
If the parties are unable to agree on the selection of an index which would most
accurately carry out the intent hereof, or if there is a dispute with respect to
any computations as called for herein, then the issue with respect thereto shall
be determined by arbitration according to the then existing rules of the
American Arbitration Association. Nothing contained herein shall be construed to
prevent the Company from increasing Executive's Base Annual Salary more often
than annually or by a higher amount than required by the Index.

(b) EMPLOYEE BENEFITS. Executive shall participate in the
Company's 1997 Stock Option Plan and all other insurances, or insurance plans,
and employee benefits and bonuses covering the Company's senior executive
officers as are now or may in the future be in effect. Employee shall be
accorded at least the same level of insurance benefits and coverage, both as to
types and amounts, as he has been accorded for the three months immediately
preceding the date hereof, and the Company shall bear the full cost of providing
such insurance coverage.

(c) EXPENSES. The Company shall reimburse Executive for all
reasonable expenses incurred by him in the course of conducting his duties
hereunder.

(d) VACATION. Executive shall be entitled to a minimum of
three weeks paid vacation per year.

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<PAGE>

(e) ADDITIONAL COMPENSATION. Notwithstanding anything to the
contrary contained in this Agreement, Executive shall be entitled to all
benefits, including bonuses, paid or given by the Company to executive officers
of the Company during the Term, and nothing contained in this Agreement shall in
any way be deemed to limit Executive's receipt of or participation in such
benefits, bonuses or benefit plans or to preclude the Company from making
additional payments, in the form of bonuses or otherwise, or conferring
additional benefits upon Executive.

5. RESTRICTIONS.

(a) NON-COMPETITION; NON-SOLICITATION. During the "Restricted
Period" (as hereinafter defined), Executive agrees not to, directly or
indirectly, alone or as a partner, officer, director, employee, consultant,
agent, independent contractor, member or stockholder of any company or person,
engage in any business activity, including but not limited to any business
activity related to the design, sourcing, manufacture, marketing or sale of
consumer electronic products in the "Restricted Area" (as hereinafter defined)
which is directly or indirectly in competition with the products being designed,
sourced, manufactured, marketed or sold by the Company or any subsidiary or
which is directly or indirectly detrimental to the business of the Company or
any subsidiary; provided, however, that the record or beneficial ownership by
Executive of five percent (5%) of the publicly traded capital stock of any such
company or person for investment purposes shall not be deemed to be in violation
of this Section 5(a) so long as Executive is not an officer, director, employee
or consultant of such company or person.

Executive further agrees that, during the "Non-Solicitation Period" (as
hereinafter defined), Executive shall not in any capacity, either separately,
jointly or in association with others, directly or indirectly do any of the
following: (a) recruit, solicit, induce or otherwise influence any employee,
director, officer, consultant, agent, supplier, customer, prospect, proprietor,
partner, stockholder, lender, joint venturer, investor, lessor or any other
person or entity that had a business relationship with the Company or any
subsidiary at any time during the two (2) years prior to the date of such
solicitation, to discontinue, reduce or modify such relationship with the
Company or any subsidiary; or (b) employ or seek to employ any person or agent
who is then employed or retained by the Company or any subsidiary (or who was so
employed or retained at any time within the two (2) years prior to the date
Executive employs or seeks to employ such person).

The "Restricted Period" shall mean the period of two (2) years after
the date on which Executive's employment with the Company under this Agreement
is terminated. The "Restricted Area" shall mean the United States of America,
Mexico, South America, Central America and the Caribbean.

Executive acknowledges and agrees that the covenants provided for in
this Section 5(a) are reasonable and necessary in terms of time, area and line
of business to protect the Company's legitimate business interests in protecting
its "Trade Secrets" (as hereinafter defined). Executive further acknowledges and
agrees that such covenants are reasonable and necessary in terms of time, area
and line of business to protect the Company's other legitimate business
interests,

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<PAGE>

which include its interests in protecting its (x) valuable "Confidential
Information" (as hereinafter defined), (y) substantial relationships with
specific customers throughout the United States of America, Mexico, South
America, Central America and the Caribbean and (z) customer goodwill associated
with its ongoing business by way of its marketing throughout the United States
of America, Mexico, South America, Central America and the Caribbean. Executive
hereby expressly authorizes the enforcement of the covenants provided for in
this Section 5(a) by (w) the Company, (x) any assignee of the Company, (y) any
affiliate of the Company and (z) any successor to the business of the Company.
To the extent that the covenant provided for in this Section 5(a) may later be
deemed by a court to be too broad to be enforced with respect to its duration or
with respect to any particular activity or geographic area, the court making
such determination shall have the power to (and the parties contemplate that
such court will) reduce the duration or scope of the provision, and to add or
delete specific words or phrases to or from the provision. The provision as
modified shall then be enforced.

(b) NON-DISCLOSURE. During the term of this Agreement and
during the periods described in the last sentence of this paragraph, Executive
shall (i) receive and hold all Company Information in trust and in strictest
confidence, (ii) protect the Company Information from disclosure and shall in no
event take any action causing, or fail to take any action necessary to prevent,
any Company Information to lose its character as Company Information or as
property of the Company, and (iii) not, directly or indirectly, use, disseminate
or otherwise disclose any Company Information to any third party without the
prior written consent of the Company, which may be withheld in the Company's
absolute discretion. The provisions of this paragraph shall survive the
termination of this Agreement (x) for a period of five years with respect to
Confidential Information and (y) with respect to Trade Secrets, for so long as
any such information qualifies as a Trade Secret under applicable law.

"Company Information" shall mean Confidential Information and Trade
Secrets. "Confidential Information" shall mean confidential data and
confidential information relating to the business and/or products of the Company
and its subsidiaries (which does not rise to the status of a Trade Secret under
applicable law) which is or has been disclosed to Executive or of which
Executive became aware as a consequence of or through the performance of its
obligations under this Agreement and which has value to the Company and its
subsidiaries and is not generally known to competitors of the Company and its
subsidiaries. Confidential Information shall not include any data or information
that (i) has been voluntarily disclosed to the general public by the Company or
its subsidiaries, (ii) has been independently developed and disclosed to the
general public by others or (iii) otherwise enters the public domain through
lawful means. "Trade Secrets" shall mean information of the Company and its
subsidiaries, including, but not limited to, technical or non-technical data,
formulas, designs, styles, specifications, configurations, concepts, techniques,
procedures, production methods, customer lists, compilations, programs,
financial data, financial plans, product or service plans or lists of actual or
potential customers or suppliers, which (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons or entities which can obtain
economic value from its disclosure or use, and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.

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<PAGE>

(c) INJUNCTION. The parties hereto hereby acknowledge that a
breach or violation by Executive of any or all of the covenants and agreements
contained in this Section 5 may cause irreparable harm and damage to the Company
in a monetary amount which may be virtually impossible to ascertain. As a
result, Executive acknowledges and agrees that the Company shall be entitled to
an injunction from any court of competent jurisdiction without having to post a
bond and restraining any breach or violation of any or all of the covenants and
agreements contained in this Section 5 by Executive, either directly or
indirectly, and that such right to injunction shall be cumulative and in
addition to whatever other rights or remedies that the Company may possess
hereunder, at law or in equity. Nothing contained in this Section 5 shall be
construed to prevent the Company from seeking and recovering from Executive
damages sustained by it as a result of any breach or violation by any of them of
any of the covenants or agreements contained in this Section 5.

6. DEATH. If Executive shall die during the Term of this Agreement, the
Term shall terminate on the date thereof, and the Company shall pay Executive's
estate a sum equivalent to one year's Base Annual Salary, as adjusted pursuant
to Section 4(a) above. Such payment shall be paid within 90 days of Executive's
death and shall be in addition to any life insurance benefits payable as the
result of Executive's death.

Notwithstanding anything to the contrary contained herein, in
the Company's 1997 Stock Option Plan or the related stock option agreements or
in any of the Company's other stock option plans, incentive compensation plans
or similar plans or in the related agreements between the Company and Executive
from time to time, if at any time during the Term there shall be a change in
control of the Company, then Executive shall have the option of terminating this
Agreement immediately upon notice and, in such event: (i) any stock option of
the Company granted to Executive shall be exercisable immediately and the stock
of the Company acquired pursuant to such exercise may be sold by Executive
subject to no restrictions by the Company whatsoever (other than those imposed
by federal and state securities laws); and (ii) the Company shall pay to
Executive, at the time of such termination, a lump sum equal to three times
Executive's Base Annual Salary, adjusted pursuant to Section 4(a) above for the
fiscal year in

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<PAGE>

which such termination occurs. The Company's execution of this Agreement
constitutes the determination in writing of its Board of Directors to provide
for the acceleration of vesting of Executive's stock options pursuant to Section
8(b) of the Company's 1997 Stock Option Plan and Section 10 of any Stock Option
Grant thereunder. For purposes of this Agreement, a "change in control" shall
mean:

(a) (i) (A) The acquisition (other than by or from
the Company), at any time after the date hereof, by any
person, entity or "group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the "Exchange Act"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
15% or more of either the then outstanding shares of Common
Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in
the election of Directors, which acquisition has not been
approved by the Board; or

(b) The four (4) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") or any group of the Incumbent Board
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a Director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was approved
by a vote of at least a majority of the Directors then comprising the Incumbent
Board (as opposed to an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the Directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be, for purposes of this Agreement, considered as though such person were
a member of the Incumbent Board.

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<PAGE>

right to terminate under the conditions set forth above, Executive agrees to
consult with the Company and its officers if requested to do so for a period of
at least three years from the date of such termination. However, Executive shall
be required to devote only such part of his time to such services as Executive
believes reasonable in Executive's sole discretion, and the time and date such
services are offered shall be determined by Executive so long as that time and
date is within a reasonable period of time after the request. It is expressly
agreed that the Company's rights to avail itself of the advice and consultation
services of Executive shall at all times be exercised in a reasonable manner,
that adequate notice shall be given to Executive in such events, and that
noncompliance with any such request by Executive for good cause, including, but
not limited to, ill health, prior commitments, conflicts of interest or absence
from Miami-Dade County, Florida, shall not constitute a breach or violation of
this Agreement. Executive agrees that, except for reimbursement of all
reasonable expenses incurred by him with respect to such consultation and
advisory services, payable as such consultation and advisory services are
rendered, he shall not be entitled to any further compensation. It is understood
that in furnishing any advisory and consulting services provided herein,
Employee shall not be an employee of the Company but shall act in the capacity
of an independent contractor.

9. INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations or improvements in the Company's method of conduction its business
(including new contributions, improvements, ideas and discoveries, whether
patentable or not) conceived or made by him during his employment with the
Company belong to the Company. Executive will promptly disclose such inventions,
innovations or improvements to the Board and perform all actions reasonably
requested by the Board to establish and confirm such ownership.

10. WAIVERS. It is understood that either party may waive the strict
performance of any covenant or agreement made herein; however, any waiver made
by either party hereto must be duly made in writing in order to be considered a
waiver, and the waiver of one covenant or agreement shall not be considered a
waiver of any other covenant or agreement unless specifically stated in writing
as aforementioned.

11. SAVINGS PROVISION. The invalidity, in whole or in part, of any
covenant or restriction, or any section, subsection, sentence, clause, phrase or
word, or other provisions of this Agreement, as the same may be amended from
time to time, shall not affect the validity of the remaining portions thereof.

12. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Florida.

13. NOTICES. If either party desires to give notice to the other in
connection with any of the terms and provisions of this Agreement, such notice
must be in writing and given by personal delivery or by Federal Express, UPS or
other similar courier service, to the recipient at the address set forth below
and shall be deemed effective upon receipt.

-7-
<PAGE>

If to the Company: Newtech Electronics Industries, Inc.
16550 N.W. 10th Avenue
Miami, Florida 33169

If to Executive: Hatch Masuda
_____________________________
_____________________________

14. DEFAULT. In the event either party defaults in the performance of
its obligations under this Agreement, the nondefaulting party may, after giving
30 days notice to the defaulting party to provide a reasonable opportunity to
cure such default, proceed to protect its rights by suit in equity, action at
law, or, where specifically provided for herein, by arbitration, to enforce
performance under this Agreement or to recover damages for breach thereof,
including all costs and attorneys' fees, whether settled out of court,
arbitrated or tried (at both trial and appellate levels).

15. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.

(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (a "Payment"), would be nondeductible by the Company for Federal
income tax purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), then the aggregate present value of amounts
payable or distributable to or for the benefit of Executive pursuant to this
Agreement (such payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be nondeductible by the Company because of Section 280G of the Code.
Anything to the contrary notwithstanding, if the Reduced Amount is zero and it
is determined further that any Payment which is not an Agreement Payment would
nevertheless be nondeductible by the Company for Federal income tax purposes
because of Section 280G of the Code, then the aggregate present value of
Payments which are not Agreement Payments shall also be reduced (but not below
zero) to an amount expressed in present value which maximizes the aggregate
present value of Payments without causing any Payment to be nondeductible by the
Company because of Section 280G of the Code. For purposes of this Section 15,
present value shall be determined in accordance with Section 280G(d)(4) of the
Code.

(b) All determinations required to be made under this Section
15 shall be made by the Miami, Florida office of Ernst & Young, independent
certified public accountants, or, at Executive's option, any other nationally or
regionally recognized firm of independent public accountants selected by
Executive and approved by the Company, which approval shall not be unreasonably
withheld or delayed (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and Executive within twenty (20)
business days of the date of a change in control (as defined in Section 8 of
this Agreement, as amended from time

-8-
<PAGE>

to time) or such earlier time as is requested by the Company and an opinion to
Executive that he has substantial authority not to report any excise tax on his
Federal income tax return with respect to any Payments. Any such determination
by the Accounting Firm shall be binding upon the Company and Executive.
Executive shall determine which and how much of the Payments shall be eliminated
or reduced consistent with the requirements of this Section 15, provided that,
if Executive does not make such determination within ten (10) business days of
the receipt of the calculations made by the Accounting Firm, the Company shall
elect which and how much of the Payments shall be eliminated or reduced
consistent with the requirements of this Section 15 and shall notify Executive
promptly of such election. Within five (5) business days thereafter, the Company
shall pay to or distribute to or for the benefit of Executive such amounts as
are then due to Executive under this Agreement. All fees and expenses of the
Accounting Firm incurred in connection with the determinations contemplated by
this Section 15 shall be borne by the Company.

* * * *

[SIGNATURES APPEAR ON FOLLOWING PAGE]

-9-
<PAGE>

IN WITNESS WHEREOF, the Company and Executive have signed this
Agreement as of the day and year first above written.

NEWTECH ELECTRONICS INDUSTRIES, INC.

By:/S/ JOEL NEWMAN
----------------------------------------------
Name: Joel Newman
Title: Chairman, Chief Executive Officer and
President

EXECUTIVE:

/S/ HATCH MASUDA
-------------------------------------------------
Hatch Masuda

EXHIBIT 10.36

EMPLOYMENT AGREEMENT

RECITALS

WHEREAS, Executive is the Vice President, Finance and Chief Financial
Officer of the Company.

AGREEMENT

1. EMPLOYMENT. Executive shall be employed as the Vice President,
Finance and Chief Financial Officer of the Company.

2. TERM. The term of this Agreement shall commence upon the date of the
consummation of the Offering (the "Commencement Date") and shall terminate as
provided below (the "Term"). Except as otherwise provided in Sections 6, 7 and
13 below, and except for termination for cause, the Term shall be a continuous
two-year period commencing this date and running for a period such that on each
"Anniversary Date," as defined below, one additional year automatically shall be
added. On, or not more than 60 days prior to, any Anniversary Date either party
may provide written notice to the other party of that party's intention not to
extend the Term of this Agreement beyond the number of years then remaining in
the Term, which number shall always be two. Such written notice shall be deemed
the notice to terminate this Agreement at the end of the two-year term then in
effect. The "Anniversary Date," as used herein, shall be the first day of the
second year of the Term and the first day of each subsequent year, including
each year beyond the first two years of the Term. It is the intention of the
parties that the Term as of each Anniversary Date automatically shall be two
years, that at least two years' written notice shall be required to terminate
this

<PAGE>

Agreement, except as otherwise provided in Sections 6, 7 and 13, and except for
termination for cause, and that said written notice to terminate may only be
given on, or not more than 60 days prior to, an Anniversary Date.

3. DUTIES. During the Term, Executive shall use her best efforts and
devote all of her working time and attention to the affairs of the Company in
order to perform the duties of the Vice President, Finance and Chief Financial
Officer of the Company. Executive shall report directly to the Chief Executive
Officer and President of the Company and shall perform such reasonable tasks and
carry out such reasonable responsibilities as the Company's Board of Directors
(the "Board") or the Chief Executive Officer and President shall assign or
designate.

4. COMPENSATION. During the Term of this Agreement, the Company shall
compensate Executive as follows:

(a) SALARY. The Company shall pay Executive a base annual
salary of $110,000, to be distributed in equal bi-weekly installments (the "Base
Annual Salary"). The Base Annual Salary shall commence on the Commencement Date
and shall remain in effect for the next consecutive twelve months of the Term.
Thereafter, the Base Annual Salary will increase progressively for each of the
ensuing twelve-month periods ("Fiscal Year") during the Term by an amount at
least equal to the percentage increase in the Miami-Dade County Consumer Price
Index published by the Bureau of Labor Statistics, United States Department of
Labor (the "Index") for the twelve-month period beginning three months before
the beginning of each such Fiscal Year. If at any time at which the
determination of the Base Annual Salary adjustment is required the Index is no
longer published or issued, the parties shall use such other index as is then
generally recognized or accepted for similar determinations of purchasing power.
If the parties are unable to agree on the selection of an index which would most
accurately carry out the intent hereof, or if there is a dispute with respect to
any computations as called for herein, then the issue with respect thereto shall
be determined by arbitration according to the then existing rules of the
American Arbitration Association. Nothing contained herein shall be construed to
prevent the Company from increasing Executive's Base Annual Salary more often
than annually or by a higher amount than required by the Index.

(b) EMPLOYEE BENEFITS. Executive shall participate in the
Company's 1997 Stock Option Plan and all other insurances, or insurance plans,
and employee benefits and bonuses covering the Company's senior executive
officers as are now or may in the future be in effect. Employee shall be
accorded at least the same level of insurance benefits and coverage, both as to
types and amounts, as she has been accorded for the three months immediately
preceding the date hereof, and the Company shall bear the full cost of providing
such insurance coverage.

(c) EXPENSES. The Company shall reimburse Executive for all
reasonable expenses incurred by her in the course of conducting her duties
hereunder.

(d) VACATION. Executive shall be entitled to a minimum of
three weeks paid vacation per year.

2
<PAGE>

6. DEATH. If Executive shall die during the Term of this Agreement, the
Term shall terminate on the date thereof, and the Company shall pay Executive's
estate a sum equivalent to one year's Base Annual Salary, as adjusted pursuant
to Section 4(a) above. Such payment shall be paid within 90 days of Executive's
death and shall be in addition to any life insurance benefits payable as the
result of Executive's death.

7. DISABILITY. If during the Term Executive is unable to perform the
essential duties of her position, with or without reasonable accommodation, by
reason of illness or incapacity, for a period of 360 consecutive days or more,
the Company may, at its option, upon written notice to Executive, terminate this
Agreement, which termination shall be effective one year from the date of such
written notice. Such termination, however, shall not affect any rights of
Executive to insurance payments due to Executive as a result of the insurance
coverage provided for in Paragraph 4(c). Determination of whether Executive is
disabled shall be determined in accordance with the Company's long-term
disability plan.

3
<PAGE>

Executive's Base Annual Salary, adjusted pursuant to Section 4(a) above for the
fiscal year in which such termination occurs. The Company's execution of this
Agreement constitutes the determination in writing of its Board of Directors to
provide for the acceleration of vesting of Executive's stock options pursuant to
Section 8(b) of the Company's 1997 Stock Option Plan and Section 10 of any Stock
Option Grant thereunder. For purposes of this Agreement, a "change in control"
shall mean:

(a) (i) (A) The acquisition (other than by or from
the Company), at any time after the date hereof, by any person, entity or
"group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of
either the then outstanding shares of Common Stock or the combined voting power
of the Company's then outstanding voting securities entitled to vote generally
in the election of Directors, which acquisition has not been approved by the
Board; or

(ii) Such change in control results in a diminution
in Executive's compensation, responsibilities or position such that Executive
cannot in good faith continue to fulfill the responsibilities for which she is
employed, as determined by Executive in her sole discretion, and if such change
in control did not occur due to Executive's intentional bulk sale of voting
shares of the Company owned by her directly to such control persons or group; OR

4
<PAGE>

shall be terminated, except as follows. In consideration for such lump sum
payment and for the right to terminate under the conditions set forth above,
Executive agrees to consult with the Company and its officers if requested to do
so for a period of at least three years from the date of such termination.
However, Executive shall be required to devote only such part of her time to
such services as Executive believes reasonable in Executive's sole discretion,
and the time and date such services are offered shall be determined by Executive
so long as that time and date is within a reasonable period of time after the
request. It is expressly agreed that the Company's rights to avail itself of the
advice and consultation services of Executive shall at all times be exercised in
a reasonable manner, that adequate notice shall be given to Executive in such
events, and that noncompliance with any such request by Executive for good
cause, including, but not limited to, ill health, prior commitments, conflicts
of interest or absence from Miami-Dade County, Florida, shall not constitute a
breach or violation of this Agreement. Executive agrees that, except for
reimbursement of all reasonable expenses incurred by her with respect to such
consultation and advisory services, payable as such consultation and advisory
services are rendered, she shall not be entitled to any further compensation. It
is understood that in furnishing any advisory and consulting services provided
herein, Employee shall not be an employee of the Company but shall act in the
capacity of an independent contractor.

11. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Florida.

If to the Company: Newtech Electronics Industries, Inc.
16550 N.W. 10th Avenue
Miami, Florida 33169

If to Executive: Leonor Schuck
16400 Lochness Lane
Miami Lakes, Florida 33014

5
<PAGE>

14. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.

(b) All determinations required to be made under this Section
14 shall be made by the Miami, Florida office of Ernst & Young, independent
certified public accountants, or, at Executive's option, any other nationally or
regionally recognized firm of independent public accountants selected by
Executive and approved by the Company, which approval shall not be unreasonably
withheld or delayed (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and Executive within twenty (20)
business days of the date of a change in control (as defined in Section 8 of
this Agreement, as amended from time to time) or such earlier time as is
requested by the Company and an opinion to Executive that he has substantial
authority not to report any excise tax on her Federal income tax return with
respect to any Payments. Any such determination by the Accounting Firm shall be
binding upon the Company and Executive. Executive shall determine which and how
much of the Payments shall be eliminated or reduced consistent with the
requirements of this Section 14, provided that, if Executive does not make such
determination within ten (10) business days of the receipt of the calculations
made by the Accounting Firm, the Company shall elect which and how much of the
Payments shall be eliminated or reduced consistent with the requirements of this
Section 14 and

6
<PAGE>

shall notify Executive promptly of such election. Within five (5)
business days thereafter, the Company shall pay to or distribute to or for the
benefit of Executive such amounts as are then due to Executive under this
Agreement. All fees and expenses of the Accounting Firm incurred in connection
with the determinations contemplated by this Section 14 shall be borne by the
Company.

* * * *

[SIGNATURES APPEAR ON FOLLOWING PAGE]

7
<PAGE>

IN WITNESS WHEREOF, the Company and Executive have signed this
Agreement as of the day and year first above written.

NEWTECH ELECTRONICS INDUSTRIES, INC.

By:/S/ JOEL NEWMAN
---------------------------------------------
Name: Joel Newman
Title: Chairman, Chief Executive Officer and
President

EXECUTIVE:

/S/ LEONOR SCHUCK
------------------------------------------------
Leonor Schuck

EXHIBIT 23.1

Consent of Independent Certified Public Accountants

We consent to the reference to our firm under the captions "Experts" and
"Selected Consolidated Financial Data" and to the use of our reports dated April
3, 1998, except for the last paragraph of Note 1, as to which the date is April
10, 1998, in Amendment No. 2 to the Registration Statement (Form S-1 No.
333-52607) and related Prospectus of Newtech Electronics Industries, Inc. and
subsidiaries for the registration of 000,000 shares of its common stock.

/S/ ERNST & YOUNG LLP

Miami, Florida
July 23, 1998

EXHIBIT 23.2

Consent of Independent Certified Public Accountants

We have issued our report dated April 2, 1998, accompanying the financial
statements of Durable Electronics Industries Limited not presented separately in
Amendment #2 to the Registration Statement on Form S-1 and Prospectus of Newtech
Electronics Industries, Inc. We consent to the use of the aforementioned report
in Amendment #2 to the Registration Statement on Form S-1 and Prospectus, and to
the use of our name as it appears under the caption "Experts."

/S/ GRANT THORNTON

Hong Kong

24 July 1998