EASTCO INDUSTRIAL SAFETY CORP, POS AM, 1995-10-27

EASTCO INDUSTRIAL SAFETY CORP
POS AM, 1995-10-27
ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES

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As filed with the Securities and Exchange Commission on October 27, 1995.
Registration No. 33-74988
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-1
ON
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

EASTCO INDUSTRIAL SAFETY CORP.
(Exact name of registrant as specified in its charter)

New York 5098 11-1874010
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Code Number)
organization)

130 West 10th Street
Huntington Station, New York 11746
(516) 427-1802
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive office)

Mr. Alan E. Densen
President
130 West 10th Street
Huntington Station, New York 11746
(516) 427-1802
(Name, address, including zip code, and telephone number
including area code, of agent for service)

Copies To:
Herbert W. Solomon, Esq.
Scott D. Zucker, Esq.
Hollenberg Levin Solomon Ross & Belsky, LLP
585 Stewart Avenue
Garden City, New York 11530
(516) 745-6000
fax (516) 745-6642

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 check the following box. [X]

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 that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.

<PAGE>

The Registrant hereby withdraws from registration 230,000 Units, including
230,000 shares of Common Stock, 230,000 Class A Warrants underlying the Units
and 230,000 shares of Common Stock issuable upon exercise of the Class A
Warrants, which securities were previously registered as part of the
Underwriter's Warrant.
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.

Cross Reference Sheet Showing Location
in Prospectus of Information
Required by Items of Form SB-2

Item and Heading Location in Prospectus

1. Front of the Registration Cover Page of Prospectus
Statement and Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Inside Front and Outside
of Prospectus Back Cover Pages of Prospectus
3. Summary Information and Prospectus Summary;
Risk Factors Risk Factors
4. Use of Proceeds Prospectus Summary;
Use of Proceeds
5. Determination of Offering Price Plan of Distribution
6. Dilution Dilution
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Business - Legal Proceedings
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Shareholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of Named Experts Legal Matters; Experts
and Counsel
14. Disclosure of Commission Management -
Position on Indemnification Indemnification of
for Securities Act Liabilities Directors and Executive Officers
15. Organization Within Last Five Not Applicable
Years
16. Description of Business Prospectus Summary; Business
17. Management's Discussion and Management's Discussion
Analysis or Plan of Operation and Analysis of Financial
Condition and Results of
Operations
18. Description of Property Business - Properties
19. Certain Relationships and Certain Transactions
Related Transactions
20. Market for Common Equity and Market Information;
Related Stockholder Matters Dividend Policy
21. Executive Compensation Management-Executive Compensation
22. Financial Statements Financial Statements
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
2,770,833 Shares of Common Stock
$1.30 per Share

This Prospectus relates to an offering (the "Offering") by Eastco
Industrial Safety Corp. (the "Company" and sometimes "Eastco" when referring to
the parent company only) of the following securities: (a) 2,262,500 shares of
the Company's common stock, $0.12 (the "Common Stock") issuable upon the
exercise of the Company's class A redeemable common stock purchase warrants (the
"Class A Warrants"); (b) 400,000 shares of Common Stock issuable upon the
exercise of warrants purchased in January 1994 by Anthony P. Towell (the "Towell
Warrants"), the Company's Chief Financial Officer, from Scorpio Partners, L.P.
("Scorpio"); and (c) 108,333 shares of Common Stock issuable upon the exercise
of warrants in connection with the acquisition of the mortgage on the Company's
premises issued in June, 1992(the "West 10th Street Warrants"). The Class A
Warrants, the Towell Warrants and the West 10th Street Warrants are collectively
referred to herein as the "Warrants". The Class A Warrants were previously sold
as part of 2,300,000 units (the "Units") which were sold to the public in April,
1994 by the Company (the "Unit Offering") through Lew Lieberbaum & Co., Inc.
(the "Unit Underwriter"). Each Unit sold to the public consisted of one share
of Common Stock and one Class A Warrant originally exercisable at $2.40 per
share, which exercise price was reduced to $1.30 per share on January 31, 1995.

There are presently 2,262,500 outstanding Class A Warrants. Each Class A
Warrant entitles the holder to purchase one share of Common Stock at an exercise
price of $1.30 per share, subject to adjustment in certain circumstances
pursuant to the anti-dilution provisions thereof, until April 11, 1999. The
Class A Warrants are redeemable, at the option of the Company, in whole or in
part at a price of $.10 per Class A Warrant, at any time prior to their
expiration, on 30 days prior written notice to the registered holders of the
Class A Warrants, provided that the closing high bid price of the Common Stock
(if the Common Stock is then traded on The NASDAQ Stock Market ("NASDAQ") or
last sale price per share (if the Common Stock is then traded on a national
securities exchange) for a period of 10 consecutive trading days ending on the
third day prior to the date of the notice of redemption equals or exceeds at
least $1.95 (150% of the then exercise price of the Class A Warrants) subject
to adjustment. The Class A Warrants will be exercisable until the close of
business on the day preceding the date fixed for redemption. See "Description
of Securities -- Warrants -- Class A Warrants."

The Towell Warrants were purchased by Anthony P. Towell, the Company's
Chief Financial Officer from Scorpio for $200,000. Each Towell Warrant entitles
Mr. Towell to purchase one share of Common Stock at an exercise price of $1.30
per share subject to adjustment in certain circumstances until April 11, 1999.
See "Description of Securities -- Warrants -- Towell Warrants."

The West 10th Street Warrants were issued to a group of investors in
connection with a modification of indebtedness agreement which reduced the
mortgage on the Company's premises and forgave the balance. Each West 10th
Street Warrant entitles the holder to purchase one share of Common Stock at an
exercise price of $1.30 per share subject to adjustment in certain circumstances
until April 11, 1999. See "Description of Securities -- Warrants -- West 10th
Street Warrants."

The public offering prices of the Common Stock offered hereby are equal to
the exercise price of the Class A Warrants, Towell Warrants and West 10th Street
Warrants.

The Company's Common Stock and Class A Warrants are traded on NASDAQ under
the symbols "ESTO" and "ESTOW", respectively. On October 24, 1995, the closing
prices of the Company's Common Stock and Class A Warrants as reported by NASDAQ
was $2.00 and $0.52, respectively. There is no public market for the Towell
Warrants or the West 10th Street Warrants. See "Market Information."

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."

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

The date of this Prospectus is ___________.
<PAGE>
<PAGE>
PROSPECTUS SUMMARY

The following is a summary as of the date hereof of certain information
contained in this Prospectus and is qualified in its entirety by the more
detailed information and Consolidated Financial Statements, including the
Notes thereto, appearing elsewhere in this Prospectus.

The Company

Eastco Industrial Safety Corp. is a corporation organized and existing
under the laws of the State of New York, having been incorporated on May 15,
1958. The Company, through its wholly-owned subsidiaries, Disposable Safety
Wear, Inc. ("Disposable"), Safety Wear Corp. ("Safety Wear"), Puerto Rico
Safety Equipment Corporation ("Puerto Rico Safety Equipment"), and Puerto
Rico Safety Corp. ("Puerto Rico Safety"), manufactures industrial protective
clothing products and distributes a wide range of industrial safety products.
The Company's Manufacturing Operations sells its products to distributors.
The Company's Distribution Operations sells products to "end users,"
including manufacturing companies and service businesses, public utilities,
fisheries, pharmaceutical plants, the transportation industry and companies
engaged in hazardous materials abatement.

Manufacturing Operations

Manufactured products are sold under the "Charkate / Worksafe",
"Charkate", "Worksafe" and "COVER-UP" trade names. The Company, through
Disposable, Safety Wear and Puerto Rico Safety Equipment, manufactures
disposable and reusable industrial protective apparel. Disposable protective
products items include coveralls, shirts, pants, hats, hoods, aprons, smocks,
lab coats, hazardous material handler suits, examination gowns, sleeves, shoe
covers and related items. Disposable clothing is designed to protect the
user from, among other things, splash, dirt contamination and against a wide
range of hazardous substances. Disposable clothing is made primarily of a
spun bonded polyolefin produced solely by Dupont under the trade name Tyvek .
Reusable industrial protective clothing consists of items for the protection
of various parts of the body which are designed to shield the user from,
among other things, splash, dirt, contamination, heat, fire, cold and the
outside environment. Specific products manufactured include coveralls,
gloves, mitts, shirts, thermal underwear, sleeves, coats, pants, leggings,
spats, bibs, safety vests and a variety of other kinds of protective clothing
and uniforms. The Company also manufactures welding blankets, curtains and
screens.

The Company's Manufacturing Operations and warehousing are located in
Puerto Rico, Alabama and California and are primarily directed from New York.
The Company's products are sold primarily in the United States and Puerto
Rico. In addition, manufactured products are sold through the Company's
Distribution Operations in the Northeastern region of the United States and
Puerto Rico to "end-users". See "Business -- Sales and Marketing."

Distribution Operations

The Company, primarily through Eastco, distributes industrial safety
products to "end-users" made by the Charkate / Worksafe division as well as
by non-affiliated companies. These products include hard hats, protective
glasses, ear muffs, ear plugs, respirators, goggles, face shields, rainwear,
protective footwear, first-aid kits, monitoring devices, signs and related

<PAGE>

products. These products are sold to manufacturing companies and service
businesses, including public utilities, fisheries, hospitals, pharmaceutical
plants, the transportation industry and companies engaged in hazardous
materials abatement.

The Company supplies a variety of items which may be used during the
removal and/or encapsulation of hazardous materials in office buildings,
chemical plants, refineries, electric generating plants and schools.
Abatement products sold by the Company include in the largest part, items
made by other companies, such as negative air machines, respirators, air
filtration equipment, vacuums, polybags and sheetings, decontamination
showers, signs, tools, pumps, sprayers and related equipment. The Company
does not engage in the removal or encapsulation of hazardous materials. See
"Business -- Sales and Marketing."

The Company's Distribution Operations are primarily directed from the
Company's offices in New York. The Company also has facilities for
warehousing and distribution of its non- manufactured products in Puerto
Rico, Connecticut and Florida. Items distributed are sold primarily in the
Northeastern region of the United States. See "Business -- Sales and
Marketing."

The Company's executive offices are located at 130 West 10th Street,
Huntington Station, New York 11746 and its telephone number is (516)
427-1802.

The Offering

Securities Offered 2,262,500 shares of Common Stock
underlying the Class A Warrants, 400,000
shares of Common Stock underlying the
Towell Warrants and 108,333 shares of
Common Stock underlying the West 10th
Street Warrants. See "Description of
Securities."

Offering Price $1.30 per share.

Common Stock outstanding prior to
the Offering 3,614,883 shares of Common Stock

Common Stock to be outstanding
after the Offering(1) 6,385,716 shares of Common Stock

Warrants
Number to be outstanding
after the Offering and prior
to the exercise of Warrants 2,262,500 Class A Warrants

400,000 Towell Warrants

108,333 West 10th Street Warrants

Exercise terms Each Warrant entitles the holder to
purchase one share of Common Stock at a
price of $1.30, subject to adjustment in
certain circumstances. See "Description

<PAGE>

of Securities."

Expiration date April 11, 1999.

Redemption of Class
A Warrants The Class A Warrants are redeemable by
the Company, at any time, at a price of
$.10 per Class A Warrant, upon not less
than 30 days prior written notice to the
holders of such Class A Warrants,
provided that the closing high bid price
of the Common Stock if traded on NASDAQ
or the last sale price if traded on a
national securities exchange, for a
period of 10 consecutive trading days
ending on the third day prior to the date
on which the Company gives notice of
redemption, equals or exceeds $1.95 (150%
of the then exercise price of the Class A
Warrants). See "Description of Securities
-- Warrants -- Class A Warrants."

Use of Proceeds The net proceeds of this Offering will be
used to reduce the Company's revolving
line of credit with Congress Financial
Corporation ("Congress") and for working
capital and general corporate purposes.
See "Use of Proceeds."

Risk Factors The securities offered hereby involve a
high degree of risk and immediate
substantial dilution. See "Risk Factors"
and "Dilution."

NASDAQ Symbols Common Stock -- ESTO
Class A Warrants --ESTOW
_____________
(1) Assumes the exercise of all of the outstanding Warrants.
<PAGE>
<PAGE>

SUMMARY FINANCIAL INFORMATION

The following is a summary of the Company's financial information
extracted from the Company's indicated fiscal year end Consolidated Financial
Statements, and is qualified in its entirety by the detailed financial
information appearing in the Consolidated Financial Statements and the Notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

Statement of Income Data:
Year Ended
June 30, 1995
----------------
Net sales $24,024,897
Income before income tax provision 77,937
Net income 77,937
Net income per share $.02
Weighted average shares outstanding 3,477,383

Balance Sheet Data:
As of June 30, 1995
------------------------------------------
Pro forma
Actual Pro forma (1) As Adjusted (2)
----------- ------------- ---------------
Working capital $ 1,064,529 $ 1,113,279 $ 4,640,362
Current liabilities 8,200,620 8,200,620 5,200,620
Total assets 10,716,048 10,764,798 11,291,881
Shareholders' equity 2,025,646 2,074,396 5,601,479

(1) Gives effect to the subsequent issuance of 37,500 shares of Common Stock
on Class A Warrants exercised at $1.30 a share after June 30, 1995.

(2) Adjusted to give effect to the exercise of the warrants at $1.30 a share
and the issuance of 2,770,833 shares of Common Stock, the receipt of
$3,527,083 of net proceeds therefrom and the reduction of the loan
payable to Congress.
<PAGE>
<PAGE>
RISK FACTORS

The securities offered hereby are highly speculative and should be
purchased only by persons who can afford to lose their entire investment in
the Company. Each prospective investor should carefully consider the
following risk factors, as well as all other information set forth elsewhere
in this prospectus.

1. History of Previous Significant Losses. Although for the fiscal year
ended June 30, 1995, the Company had net income of $77,937, the Company
incurred losses of $2,711,378, $858,326, $1,362,761 and $1,388,831,
respectively, for the fiscal years ended June 30, 1994, 1993, 1992 and 1991.
The Company had not been profitable, prior to the fiscal year ended June 30,
1995, since its fiscal year ended June 30, 1989. There can be no assurance
that the Company will maintain its profitability or will not incur losses in
the future. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and the
Notes thereto.

2. Lending Arrangements; Liens on the Company's Assets. The Company is
dependent upon its revolving line of credit with Congress in the amount of
$5,750,000, which expires October 1, 1996. Interest is payable monthly at 2
1/2% over the prime rate, plus an unused line fee of .25% per year.
Borrowings under this agreement are limited to 50% of the Company's eligible
inventory up to a maximum of $2,875,000 and 80% of the Company's eligible
accounts receivable. The amounts outstanding under the line of credit at June
30, 1995 and June 30, 1994, were $4,829,000 and $3,184,000, respectively. The
Company had $40,000 available for borrowing at June 30, 1995. The loan is
subject to certain working capital and net worth covenants and is
collateralized by all of the Company's assets not previously pledged under
other loan agreements.

In September 1993, the Company received an overadvance of $500,000 from
Congress. In connection therewith, Messrs. A. Densen, L. Densen and A.
Towell, Directors and executive officers of the Company, obtained a $250,000
junior participation in the loans made to the Company from Congress by
advancing $250,000 of their funds to Congress. $250,000 of this overadvance
has been repaid to Congress. The balance of $250,000 will be repaid by
Congress, at its option, to Messrs. A. Densen, L. Densen and A. Towell,
subject to the availability of funds.

In addition, 130 West 10th Street Associates, LLC ("Associates"), a New
York limited liability company consisting of a group of investors (including
certain wives of Directors and Officers of the Company and a present Director
of the Company), acquired a first mortgage on the property containing the
Company's executive offices and warehouse located in Huntington Station, New
York (the "Huntington Property"), as well as a secondary lien on all of the
Company's assets.

In the event that the Company fails to comply with its obligations the
Company's indebtedness could be declared immediately due and payable and, in
certain cases, the Company's assets could be foreclosed upon. Moreover, to
the extent that all of the Company's assets continue to be pledged to secure
outstanding indebtedness, such assets are unavailable to secure additional
debt financing, which may adversely affect the Company's ability to borrow in
the future. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Business -- Properties," "Use of Proceeds" and

<PAGE>

"Certain Transactions."

3. Asbestos Litigation Against the Company. The Company, in the past,
used asbestos in the manufacture of its products. Such use was terminated by
the Company in the mid-1980's. It has been alleged that asbestos is a cause
of cancer, such as asbestosis, mesothelioma, and other related diseases, the
symptoms of which may not appear for twenty or more years. Since the early
1980's, numerous lawsuits have been instituted against the Company by persons
who have been exposed to asbestos and asbestos products. Such legal
proceedings, for the most part, are covered by the Company's insurance
policies.

As of June 30, 1995, the Company estimates that it is a party to
approximately 250 cases with respect to exposure to asbestos involving
approximately 480 plaintiffs, of which no cases pertain to Puerto Rico
Safety Equipment. During the quarter ended September 30, 1995, one new
action involving one plaintiff was commenced against the Company. All of the
actions against the Company to date have been brought by non-employees of the
Company and are based upon personal injury claims. The pending actions are
in the Supreme Court of the State of New York, County of New York; Superior
Court of New Jersey, Middlesex County, Law Division; Court of Common Pleas of
Luzerne County, Trial Division of Pennsylvania; and the San Francisco County,
Superior Court of California. The number of first-party plaintiffs include,
in various instances, spouses of said plaintiffs. The actions, with the
exception of one pending action, involve a multitude of defendants. The
complaints allege exposure to asbestos and asbestos products over various
periods of time. Each seeks varying amounts of damages, usually unlimited,
or for each plaintiff as high as $10,000,000 for compensatory damages and
$20,000,000 for punitive damages. There can be no assurances that the
Company will not become a party to additional asbestos actions in the future.

From 1981 through June 30, 1995, the Company estimates that
approximately 830 actions on behalf of approximately 6,400 first-party
plaintiffs have been instituted against it concerning asbestos-related claims
and that approximately 570 actions and the claims of approximately 5,920
plaintiffs have been terminated against the Company. During fiscal 1995, the
Company estimates approximately 120 actions on behalf of approximately 970
first-party plaintiffs were instituted against it and approximately 40
actions on behalf of approximately 830 plaintiffs actions were settled or
discontinued against it. The Company estimates that as of June 30, 1995,
with the exception of defense costs, a total of approximately $1,300,000 has
been paid, or agreed to be paid, in settlements to date with regard to the
terminated actions (inclusive of actions against Puerto Rico Safety
Equipment) of which all but approximately $25,000 has been paid by the
Company's insurance carriers. The Company has been notified that for actions
terminated subsequent to June 30, 1995, its share of certain settlements made
will be approximately $15,000. The foregoing is based upon information
available to the Company to date and assumes certain settlements in the
process of being made and payments to be made thereunder by insurance
companies awaiting documentation from plaintiffs. Through June 30, 1995, the
Company has paid less than $40,000 for legal and defense costs to counsel
appointed by the insurance carriers to defend it. Past results of
settlements and defense costs are not necessarily indicative of future
settlements and defense costs, which the Company is unable to predict.

The existence of the asbestos litigation may have an adverse effect upon

<PAGE>

the financial liquidity of the Company in the future. The Company is unable
to predict the outcome of this uncertainty or the total extent to which its
insurance carriers will provide coverage. Based upon prior experience, the
Company believes that additional claims will be filed in the future. Further,
the Company's independent auditors report emphasizes the uncertainties of
these matters. See "Business -- Legal Proceedings" and Auditors' Report and
Consolidated Financial Statements and the Notes thereto.

4. Explanatory Paragraph in Independent Auditors' Report. The
independent auditors' report on the Company's audited Consolidated Financial
Statements presented in this Prospectus contains a paragraph which emphasizes
a significant uncertainty which is further discussed in the Notes to the
Consolidated Financial Statements. This paragraph emphasizes that, as
discussed in Note 11 to the Consolidated Financial Statements, the Company
has made no provision for any liability that may result from certain
significant pending asbestos and a non-asbestos product liability litigation
because the ultimate outcome or range of liability, if any, resulting from
the various lawsuits cannot be presently determined. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and the Notes thereto.

5. Insurance Coverage Applicable to Asbestos Litigation. For the
period commencing April 1, 1968 to April 1, 1969 and March 11, 1971 to
November 27, 1985, the Company believes that it has various policies of
primary insurance in different amounts which would protect it against
liability for asbestos-made, product-related personal injuries. The
policies range in amounts from $50,000 to $1,000,000. The Company also
believes that since August 10, 1972 to on or about August 11, 1986 it has had
various policies for excess coverage applicable to asbestos claims. These
policies range in amounts from $500,000 to $10,000,000 for excess coverage.
There are gaps of approximately six weeks in the primary coverage between
March 11, 1971 to November 27, 1985 and approximately thirty-six months in
the excess coverage between August 10, 1972 and August 11, 1986. The
policies of insurance are not applicable to all of the subsidiaries of the
Company, which have varying coverage, and such subsidiaries may also be
without coverage for various times of their doing business. Not all of these
policies are in the possession of the Company.

Effective June 26, 1990, an agreement between the Eastco and its primary
insurance carriers dated March 26, 1990 became effective. Eastco entered
into this agreement in an effort to resolve uncertainties as to its insurance
coverage which will cover asbestos claims against the parent Company where
any exposure to asbestos is alleged during the period 1971 to 1985,
inclusive. Pursuant to this agreement, the Company is obligated to share in
the payment of asbestos-related claims against Eastco. Pursuant to the
agreement, the Company is obligated to pay 12% of all attorneys' fees
incurred on its behalf and 17% of indemnity costs (which include judgment and
settlement amounts). The balance of these costs are to be paid by the
insurance carriers, which are parties to the agreement. The agreement is
subject to policy limitations of each insurance policy. The agreement may be
terminated at any time upon ninety (90) days' notice by any of the parties
provided that termination may not be effective as to any asbestos action that
has already been placed on the trial calendar, unless it has a scheduled
trial date more than twelve (12) months from the date the notice of
termination is given. The Company has been advised that none of the pending
cases are on the trial calendar.

<PAGE>

Effective during May, 1991, the Company entered into a Settlement
Agreement and Release with Mount Vernon Fire Insurance Company. The Company
discontinued its action against Mount Vernon, which agreed that, subject to
the terms of the agreement, Mount Vernon would reimburse the Company (where
applicable) for 6.25% of attorneys' fees (52.08% of the Company's 12% share
referred to in the agreement in the previous paragraph) and 6.25% of
indemnification costs (36.76% of the Company's 17% share referred to in the
agreement in the previous paragraph). The agreement is not applicable to any
asbestos actions against the Company where no exposure is alleged to products
manufactured or distributed by Eastco between April 1, 1968 and April 1,
1969. The agreement may be terminated at any time upon 90 days' notice, but
such notice is not applicable to asbestos actions placed on a trial calendar,
unless such has a trial date more than twelve months from the date the notice
of termination is given. The agreement provides that the limit available
under the policy is $100,000 plus attorneys' fees while the agreement is in
effect and is applicable only to Eastco. Approximately $14,000 has been
reimbursed by Mount Vernon Fire Insurance Company as of June 30, 1995 for
indemnification.

The Company is unable to ascertain the total extent of insurance
applicable to asbestos claims against it or the extent to which its insurance
carriers will provide coverage. The two agreements referred to above
between the Company and the insurance carriers may not be applicable to
Puerto Rico Safety Equipment, which is covered by other insurance. To date,
the claims settled by Puerto Rico Safety Equipment have been paid in full by
insurance. No agreement has been reached with the insurance companies
confirming all of these policies, which range from $100,000 to $500,000 for
primary coverage and $1,000,000 to $5,000,000 for excess coverage. The
policies for Puerto Rico Safety Equipment cover the period March 11, 1971 to
July 23, 1986 with various gaps.

The Company's insurance may not provide coverage for punitive damages
where such damages are sought against it in pending litigation. Punitive
damages are allowable in addition to compensatory damages and are awarded as
a punishment to the defendant for wrongs in a particular case as well as for
the protection of the public against similar acts, to deter the defendant
from a repetition of the wrongful act and to serve as a warning to others.
Usually a wrong, aggravated by an evil or wrongful motive or a willful and
intentional misdoing or a reckless indifference equivalent thereto, is
required for a court to award punitive damages. The Company is unable to
specify whether its actions would give rise to punitive damages. It believes
that its actions should not give rise to punitive damages. There, however,
can be no assurance that this will be the case. See "Business" and "Legal
Proceeding."

6. Liquidation of Certain of the Companies Insurance Carriers. Union
Indemnity Insurance Company, which provided excess product liability coverage
for the Company during the period commencing September 1, 1984 through
September 10, 1984, in the amount of $1,000,000, was ordered into liquidation
by the Supreme Court of New York for New York County, effective July 16,
1985. During 1987, Integrity Insurance Co., which provided excess product
liability coverage for the Company during the period October 22, 1984 to
October 22, 1985, in the amount of $10,000,000, became subject to liquidation
in the State of New Jersey. Great Atlantic Insurance Company which provided
excess product liability coverage during the period September 10, 1984 to
November 11, 1984, in the amount of $1,000,000, is also currently in
liquidation in the State of New York. The Company has been advised that the

<PAGE>

Union Indemnity Insurance policy is not applicable to asbestos, and that no
claims may be filed under its policy with Great Atlantic Insurance Company
after February 12, 1991. No assurance can be given that other insurance
companies will not be ordered into liquidation. See "Business - Legal
Proceedings".

7. Government Regulation; No Assurance Of Compliance with OSHA. The
Company's manufacturing facilities are subject to regulation and inspection
standards established by the Occupational Safety and Health Administration
("OSHA"), which were enacted, in part, to require employers to supply
protective clothing in certain work environments. To date, the Company's
manufacturing facilities have not been inspected for compliance with the
standards established by OSHA. Although the Company believes that it is in
material compliance with current standards, there can be no assurance that
any inspection will not reveal that the Company has failed to comply with the
standards established by OSHA and that, as a result, the Company may be
required to expend sums, which can be costly, to assure compliance with OSHA
regulations. See "Business -- Government Regulation."

8. Tax Incentives. Puerto Rico Safety Equipment is engaged in
manufacturing in Puerto Rico and was granted an exemption for seventeen (17)
years under the Puerto Rico Industrial Tax Exemption Act of 1963 (the
"Industrial Tax Act") with respect to Puerto Rico income taxes on the
production of such items as safety clothing, protective sleeves, coats,
pants, hoods and jackets for the period commencing January 1, 1970. On July
1, 1989 Puerto Rico Safety Equipment was granted an extension of its
exemption and has a 90% exemption from Puerto Rico income taxes for the
ten-year period ending on June 30, 1999. During this period, Puerto Rico
Safety Equipment has a 75% exemption from Puerto Rico municipal taxes on its
real and personal property utilized in its operations. There can be no
assurance that this exemption will be extended after June 30, 1999. See
"Business - Special Tax Considerations".

Disposable has been granted a fifteen-year exemption under the
Industrial Tax Act with respect to Puerto Rico income taxes on its operations
covering the production of disposable clothing and with respect to the
property used in its operations for the period commencing June 4, 1977,
subject to the terms of the grant. The Company was advised on September 14,
1995, that this exemption has been extended until 2006 on the basis
of a 90% exemption on Puerto Rico income taxes and personal property
taxes and a 60% exemption on municipal license. See "Business - Special
Tax Considerations".

Puerto Rico Safety Equipment and Disposable have elected to apply
Section 936 of the Internal Revenue Code, effective July 1, 1979. The
provisions of Section 936 are effective until revoked by the Company. If the
conditions of Section 936(a)(2) are satisfied, the Section 936 credit equals
the portion of the United States income tax that is attributable to taxable
income from sources outside the United States derived from the active conduct
of a trade or business within a United States possession, or the sale or
exchange of substantially all of the qualified possession source investment
income. Dividends payable by each subsidiary to the Company from operations
are entitled to a 100% dividends received deduction but are subject to a 10%
withholding tax in Puerto Rico. The Omnibus Budget Reconciliation Act of
1993 (the "Omnibus Act") imposes new limitations on computing the Possession
Tax Credit under Section 936 for tax years beginning after 1993. There are
two methods for determining the credit under the new law. Under the first

<PAGE>

method, the amount of the credit may be determined by using the so-called
economic activity limit. This attempts to limit the credit by applying
various percentages to possession-based compensation, depreciation and taxes
paid or accrued. Alternatively, the Company may make an irrevocable election
when it files its June 30, 1995 federal income tax return to have present
rules apply, but to phase out the credit to 60% of the 1994 level, and
further phase down by 5% per year to 40% in 1998 and years thereafter. Since
the credit is a function of future earnings, if any, the effect of such
limitations cannot be determined at the present time. In addition, the
Omnibus Act makes the 100% dividends received deduction subject to the
Alternative Minimum Tax Calculation. No dividends have been declared on the
aggregate undistributed earnings of Puerto Rico Safety Equipment and
Disposable (which through June 30, 1995, aggregates approximately $2,458,000)
and none are intended to be declared because it is management's intention to
reinvest the earnings, if any, from such subsidiaries indefinitely. The
Company believes that based upon current operations, the Omnibus Act will not
have a material effect on the Company for the foreseeable future.

As Puerto Rico tax exemptions are reduced or expire the Company may be
required to pay taxes on income earned in Puerto Rico. The Company is unable
to predict the amount of such impact after such exemptions are reduced or
expire. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

9. Need for Substantial Inventories. The Company is required to
maintain substantial inventories for both its Manufacturing Operations and
its Distribution Operations in order to meet the immediate requirements of
its customers who require products on short notice and who do not maintain an
inventory of such products. The Company had inventory of approximately
$4,364,000 and $3,166,000 as of June 30, 1995 and June 30, 1994,
respectively. Although the Company believes it currently maintains sufficient
inventories, prior to the Unit Offering, the Company experienced periods
where it did not have sufficient working capital to maintain its inventories
to meet the demands of certain of its customers. There can be no assurance
that the Company will be able to maintain sufficient inventories or the
Company will not return to periods where there is insufficient working
capital to maintain its inventories to meet the needs of its customers. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

10. Dependence Upon DuPont For Supply of Tyvek . The Company is not
dependent upon any one company for a source of supply of raw materials for
its manufacturing operations other than DuPont which supplies the Company
with Tyvek a raw material which is used in various lines of its disposable
products. Products utilizing Tyvek accounted for approximately 35% and 29%
of consolidated sales for the fiscal years ended June 30, 1995 and June 30,
1994, respectively. Management believes that its current relationship with
DuPont is satisfactory. The Company has no contract with DuPont for the
supply of such raw material; therefore, DuPont could terminate its
relationship with the Company at any time. The Company does not believe that
an alternative source exists for the supply of Tyvek . Accordingly, the loss
of DuPont as a supplier of Tyvek would have a material adverse effect on the
Company's operation. See "Business -- Sales and Marketing" and "--
Suppliers."

11. No Dividends. The Company intends to retain future earnings to
finance future growth. Accordingly, any potential investor who anticipates

<PAGE>

the need for dividends for his investment should not purchase any of the
securities offered hereby. In addition, the Company's agreement with Congress
contains restrictions which prohibit the Company from paying cash dividends.
See "Dividend Policy."

12. Benefit of Proceeds to Management. In September 1993, the Company
received an overadvance of $500,000 from Congress. In connection therewith,
Messrs. A. Densen, L. Densen and A. Towell obtained a $250,000 junior
participation in the loans made to the Company from Congress by advancing
$250,000 of their funds to Congress. $250,000 of this overadvance has been
repaid to Congress. The balance of $250,000 will be repaid by Congress, at
its option, to Messrs. A. Densen, L. Densen and A. Towell, subject to the
availability of funds. See "Management's Discussion and Analysis of
Financial Conditions and Results of Operations". Assuming exercise of all of
the Warrants, $3,000,000 of the proceeds will be utilized to reduce the
Company's indebtedness to Congress which would thereby make it more likely
for the $250,000 junior participation to be repaid to Messrs. A. Densen, L.
Densen and A. Towell. To such an extent, such individuals will benefit from
this Offering. See "Use of Proceeds".

13. Competition. The market for industrial protective clothing products
and industrial safety products is extremely competitive. The Company faces
competition in all of its product markets from large, established companies
that have greater financial, managerial, sales and technical resources than
the Company, and some of the Company's product markets are dominated by such
larger companies. Where larger competitors offer products that are directly
competitive with the Company's products, particularly as part of an
established line of products, there can be no assurance that the Company can
successfully compete for sales and customers. Larger competitors also may be
able to benefit from economies of scale or to introduce new products that
compete with the Company's products. There can be no assurance that the
Company can successfully compete in any of its product markets. See "Business
- -- Competition."

14. Limitation on Net Operating Loss Carryforwards. As of June 30,
1995, the Company had federal net operating loss carryforwards for income tax
purposes of approximately $5,410,000 which expire through the year 2009.
These carryforwards are subject to limitations on the amount that can be
utilized by the Company in a fiscal year due to "change of ownership" rules
as defined by applicable federal tax statutes. A "change in ownership"
occurred upon the completion of the Unit Offering which caused a limitation
on the use of carryforward losses incurred prior to such ownership change.
The amount of income which may be offset after an ownership change is
determined by multiplying the fair market value of the Company at the time of
the ownership change by the long-term tax exempt rate. Based upon the number
of shares offered in the Unit Offering and the current applicable long-term
tax exempt rate, the Company's ability to utilize its net operating
carryforward losses in future years would be limited to approximately
$380,000 per year. See the Consolidated Financial Statements and the Notes
thereto.

15. Reliance on Current Management. The Company's current operations
and future success is greatly dependent upon the services of Mr. Alan Densen,
its President, Lawrence Densen, its Senior Vice President and Anthony P.
Towell, its Vice President of Finance. The loss of services of any of the
foregoing, who are each employed under written agreements for five year
terms, could have a material adverse effect on the Company. The Company has

<PAGE>

$1,000,000 of "keyman" life insurance on the life of Alan E. Densen. See
"Management."

16. Control By Management. As of the date of this Prospectus, the
Company's executive officers and directors will own of record and
beneficially, an aggregate of 27.4% of the Company's outstanding Common Stock
and may be in a position to have significant influence over the outcome of
all matters submitted to stockholders for approval, including the election of
directors of the Company, as a result of their control of such shares which
will vote on all matters. The Company's Board of Directors is divided into
two classes, each of which generally serves for a term of two years, with
only one class of directors being elected in each year. A classified board
under certain circumstances could discourage, prevent or delay a change in
control of the Company, which could have the effect of discouraging bids for
the Company and thereby prevent shareholders from receiving the maximum value
for their shares. In addition, there are provisions in the employment
agreements with Messrs. A. Densen, A. Towell and L. Densen, that provide for
them to receive immediately a lump sum payment for three years' compensation
as well as severance pay should a "Change in Control" occur, which also could
have a similar effect of deterring bids for the Company. See "Management"
and "Principal Shareholders."

17. Substantial and Immediate Dilution. Purchasers of Warrants in the
Offering will suffer immediate dilution of $0.42 per share (32%) of the net
tangible book value of their investment from the Offering Price. See
"Dilution."

18. Shares Eligible for Future Sale. Of the 3,614,883 shares of Common
Stock of the Company outstanding as of the Effective Date, 146,021 shares are
restricted securities, as that term is defined in Rule 144 promulgated under
the Securities Act of 1933 (the "Securities Act"). Absent registration under
the Securities Act, the sale of such shares is subject to Rule 144, as
promulgated under the Securities Act. In general, under Rule 144, subject to
the satisfaction of certain other conditions, a person, including an
affiliate of the Company, who has beneficially owned restricted shares of
Common Stock for at least two years is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1%
of the total number of outstanding shares of the same class, or if the Common
Stock is quoted on NASDAQ, the average weekly trading volume during the four
calendar weeks preceding the sale. A person who has not been an affiliate of
the Company for at least three months immediately preceding the sale and who
has beneficially owned the shares of Common Stock for at least three years is
entitled to sell such shares under Rule 144 without regard to any of the
volume limitations described above. In addition, 400,000 shares of Common
Stock underlying the Towell Warrants and 108,333 shares of Common Stock
underlying the West 10th Street Warrants have been included in the
Registration Statement of which this Prospectus forms a part. No assurance
can be made as to the effect, if any, that sales of shares of Common Stock or
the availability of such shares for sale will have on the market prices
prevailing from time to time. Nevertheless, the possibility that substantial
amounts of Common Stock may be sold in the public market may adversely affect
prevailing market prices for the Common Stock and could impair the Company's
ability to raise capital in the future through the sale of equity securities.
See "Shares Eligible for Future Sale."

19. Current Prospectus and State Blue Sky Registration Required to
Exercise Warrants. Holders of Warrants will have the right to exercise

<PAGE>

Warrants for the purchase of shares of Common Stock only if a current
prospectus relating to such shares is then in effect and only if the shares
are qualified for sale under the securities laws of the applicable state or
states. The Company has undertaken and intends to file and keep current the
Prospectus which will permit the purchase and sale of the Common Stock
underlying the Warrants, but there can be no assurance that the Company will
be able to do so. Although the Company intends to seek to qualify for sale
the shares of Common Stock underlying the Warrants in those states in which
the securities are to be offered, no assurance can be given that such
qualification will occur. The Warrants may be deprived of any value if a
prospectus covering the shares issuable upon the exercise thereof is not kept
current or if such underlying shares are not, or cannot be, registered in the
applicable states. See "Description of Securities -- Warrants."

20. Non-Registration in Certain Jurisdictions of Shares Underlying the
Warrants. Holders of Warrants may presently or in the future move to
jurisdictions in which the shares of Common Stock issuable upon exercise of
the Warrants are not so registered or qualified during the period that the
Warrants are exercisable. In such event, the Company would be unable to issue
shares to those persons desiring to exercise their Warrants unless and until
the shares could be registered or qualified for sale in the jurisdiction in
which such purchasers reside, or an exemption to such qualification exists in
such jurisdiction. If the Company were unable to register or qualify the
shares in a particular state and no exemption to such registration or
qualification was available in such jurisdiction, the holder of the Warrants
might not be able to realize any economic benefit from the Warrants. See
"Description of Securities -- Warrants."

21. Possible Delisting of Securities from NASDAQ System; Risks of
Low-Priced Stocks. The Company's Common Stock and Class A Warrants are
currently listed on NASDAQ. At present, the minimum maintenance criteria for
NASDAQ are $2,000,000 in assets, $1,000,000 in shareholder equity, a minimum
bid price of $1.00, at least one market maker, 300 shareholders, 100,000
share public float, and $200,000 market value for the public float. There
can be no assurance that the Company will be able to continue to maintain the
listing of its securities on NASDAQ.

22. Penny Stock Regulation. The Commission has adopted rules that
regulate broker-dealer practices in connection with transactions in "penny
stocks." Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and
volume information with respect to transactions in such securities is
provided by the exchange or system). The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from the rules, to deliver a standardized risk disclosure document prepared
by the Commission that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer must also
provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
broker-dealer and salesperson compensation information must be given to the
customer orally or in writing prior to effecting the transaction and must be
given in writing before or with the customer's confirmation. In addition, the
penny stock rules require that prior to a transaction in a penny stock not
otherwise exempt from such rules, the broker-dealer must make a special

<PAGE>

written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to
the penny stock rules. If the Company's securities become subject to the
penny stock rules, investors in this offering may find it more difficult to
sell such securities.

Although the Company believes that its securities will, as of the date
of this Prospectus, be outside the definitional scope of a penny stock, as it
will be listed on NASDAQ, in the event the Common Stock were subsequently to
become characterized as a penny stock, the market liquidity for the Company's
securities could be severely affected. In such event, the regulations on
penny stocks could limit the ability of broker-dealers to sell the Company's
securities, and thus, the ability of purchasers in this Offering to sell
their securities in the secondary market.

23. Outstanding Options and Warrants. As of the date hereof, there are
901,602 shares of Common Stock (exclusive of shares of Common Stock issuable
upon the exercise of the Warrants) subject to issuance upon currently
exercisable outstanding options and warrants at exercise prices between
$1.0625 and $3.00 per share. To the extent that outstanding options and
warrants are exercised, additional equity investment funds will be paid into
the Company at the expense of dilution to the interests of the Company's
shareholders. Moreover, the terms upon which the Company will be able to
obtain additional equity capital may be adversely affected since the holders
of outstanding options and warrants can be expected to exercise or convert
them at a time when the Company would, in all likelihood, be able to obtain
any needed capital on terms more favorable to the Company than those provided
in such securities.

24. Redemption of Class A Warrants. The Class A Warrants may be
redeemed by the Company at a redemption price of $.10 per Warrant upon 30
days prior written notice provided the average closing bid price of the
Common Stock for 10 consecutive trading days ending on the third day prior to
the date of the redemption notice equals or exceeds $1.95 (150% of the then
exercise price of the Class A Warrants). Redemption of the Class A Warrants
could force the holders to exercise the Class A Warrants and pay the exercise
price at a time when it may be disadvantageous for the holders to do so, to
sell the Class A Warrants at the then current market price when they might
otherwise wish to hold the Class A Warrants, or to accept the redemption
price, which is likely to be substantially less than the market value of the
Class A Warrants at the time of redemption. See "Description of Securities --
Warrants -- Class A Warrants."

25. New Developments. The Company will be filing with the Commission
a registration statement which shall include 100,000 shares of Common Stock
issued to the Unit Underwriter, warrants to purchase 125,000 shares of Common
Stock issued to Donald & Co., Inc., the Company's investment advisors, and
warrants to purchase 8,333 shares of Common Stock issued to certain investors
in the Company's 1991 bridge loan. See "Certain Transactions". The Company
also anticipates submitting, to its shareholders at its next annual
shareholders meeting, proposals to increase the number of options issuable
under the Company's 1994 Incentive Stock Option by an additional 550,000
shares and to adopt a Non-qualified Option Plan for 350,000 shares. See
"Management - Incentive Stock Option Plans".

<PAGE>

USE OF PROCEEDS

If all of the Warrants are exercised, of which there can be no
assurance, the Company will receive aggregate net proceeds of approximately
$3,602,083 less approximately $75,000 for expenses in connection with this
Offering, for a total net proceeds of $3,527,083. The Company anticipates
that the net proceeds of the Offering will be utilized as follows if all of
the Warrants are exercised:

Percentage
Amount of Net Proceeds
----------- ---------------
Reduction of Indebtedness $ 3,000,000 85%
to Congress (1)
Working Capital and 527,083 15%
General Corporate Purposes ----------- ----
TOTAL $ 3,527,083 100%
_______
(1) The Company, as of September 27, 1995, was indebted to Congress in the
amount of $5,565,000 on its line of credit loan. The proceeds from this
line of credit have been used for working capital. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations".

To the extent that the line of credit with Congress is reduced, the
likelihood exists that Messrs. A. Densen, A. Towell and L. Densen will be
able to be repaid their junior participation totaling $250,000 in the
Congress loan and to that extent, they will receive a direct benefit from the
Offering.

The foregoing represents the Company's best estimates of the anticipated
use of the net proceeds of the Company based upon its present plans and
certain assumptions regarding general economic conditions and the Company's
future revenues and expenditures. Proceeds not immediately required for
specified uses will be invested principally in United States government
securities, short-term certificates of deposit, money market funds or other
short-term interest-bearing investments. While the Company hopes that
substantially all of the Warrants will be exercised, if the market price of
the Company's Common Stock continues to exceed $1.30 per share, to the extent
that less than the proceeds estimated above are received by the Company, the
Company's Board will determine how much of the funds received will be applied
to each of the above uses. In addition, if the Company's Board deems it
reasonable and appropriate, the uses may be changed. Except as stated herein,
officers, directors and affiliates will not receive proceeds from the
Offering.

DILUTION

At June 30, 1995, the Company had a pro forma net tangible book value of
$2,063,081, or approximately $.57 per share outstanding, after giving effect
to the subsequent issuance of 37,500 shares of Common Stock on Class A
Warrants exercised at $1.30 a share and 100,000 shares of Common Stock issued
to Lew Lieberbaum & Co., Inc. after June 30, 1995. The net tangible book
value of the Company is equal to the Company's tangible assets less total
liabilities. The net tangible book value after the Offering will be
$5,590,164 or $.88 per share, representing an immediate increase in net
tangible book value of $.31 per share to the existing shareholders and an
immediate dilution of $.42 per share to the warrant holders. "Dilution" is
the difference between the Offering price and the net tangible book value per
share.

The following illustrates the per share dilution based on an exercise
price of $1.30 per share to the warrant holders as of June 30, 1995:

Warrant exercise price $1.30
Tangible book value per share
before the Offering $.57
Increase attributable to
exercise of warrants .31
Net tangible book value per -----
share exercise .88
----
Dilution to warrant holders $.42
====
<PAGE>
<PAGE>
CAPITALIZATION

The following table sets forth the actual and pro forma
capitalization of the Company as of June 30, 1995, as adjusted to give effect
to the exercise of the warrants pursuant to this Offering and the application
of the proceeds of this Offering. This table should be read in conjunction
with the Company's Financial Statements and the Notes thereto, included
elsewhere in this Prospectus.

June 30, 1995
---------------------------------------
Pro forma
Actual Pro forma (1) As Adjusted (2)

Loans payable - Congress
Financial $ 4,928,908 $ 4,928,908 $ 1,928,908
----------- ----------- -----------
Shareholders' equity:
Common stock $.12 par
value; authorized
20,000,000 shares,
issued and outstanding
3,477,383, 3,614,883
and 6,385,716
shares, respectively 417,286 433,786 766,286
Additional paid-in
capital 5,848,952 6,043,702 9,238,285
Accumulated deficit (4,240,592) (4,403,092) (4,403,092)
------------ ----------- -----------
Total shareholders'
equity 2,025,646 2,074,396 5,601,479
----------- ----------- -----------
$ 6,954,554 $ 7,003,304 $ 7,530,387
=========== =========== ===========
(1) Gives effect to the subsequent issuance of 37,500 shares of Common Stock
on Class A Warrants exercised at $1.30 a share and the issuance of
100,000 shares of Common Stock to Lew Lieberbaum & Co., Inc. after June
30, 1995.

(2) Adjusted to give effect to the exercise of the warrants at $1.30 a share
and the issuance of 2,770,883 shares of Common Stock, the receipt of
$3,527,083 of net proceeds therefrom and the reduction of the loan
payable to Congress Financial.

<PAGE>
<PAGE>
MARKET INFORMATION

The principal market on which the Common Stock is traded is the
over-the-counter market. The Common Stock is traded on NASDAQ on the
Small-Cap Market and its symbols is ESTO. The following chart sets forth the
high and low sales prices as determined from NASDAQ for the Common Stock for
the periods indicated:

High Low
--------- ---------
Fiscal Year Ended
June 30, 1994

First Quarter $11.00 $7.25
Second Quarter 10.75 3.13
Third Quarter 4.13 1.63
Fourth Quarter 1.81 1.75

Fiscal Year Ended
June 30, 1995

First Quarter $1.75 $0.88
Second Quarter 1.44 0.56
Third Quarter 1.63 0.75
Fourth Quarter 1.75 1.00

Fiscal Year Ended
June 30, 1996

First Quarter $2.00 $1.50
Second Quarter (through
October 24, 1995) 2.06 1.69

The approximate number of holders of record of the Common Stock, as of
September 27, 1995 was 392. The Company believes there are in excess of 800
beneficial holders of the Common Stock. On October 24, 1995, the closing
price of the Common Stock was $2.00.

DIVIDEND POLICY

The payment by the Company of dividends, if any, rests within the
discretion of its Board of Directors and, among other things, will depend
upon the Company's earnings, capital requirements and financial condition, as
well as other relevant factors. In addition, the Company's lending
arrangement with Congress prohibits the payment of dividends without their
consent. The Company has not declared any dividends since inception, and has
no present intention of paying any dividends on its Common Stock in the
foreseeable future, and intends to use earnings to generate increased growth.
<PAGE>
<PAGE>

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

Results of Operations

Fiscal Year 1995 Compared to Fiscal Year 1994

The Company's net income for fiscal 1995 was $78,000 compared to a net
loss of $2,711,000 for fiscal 1994. Fiscal 1995 was the first profitable year
for the Company since fiscal 1989.

Consolidated net sales during fiscal 1995 increased by 15.8% to
$24,025,000 from $20,746,000 during fiscal 1994. In fiscal 1995,
Distribution Operations revenues increased 6.7% to $9,233,000 from $8,654,000
and Manufacturing Operations revenues increased 22.3% to $14,792,000 from
$12,092,000. The Company believes that the increase in sales was due to
improved industry conditions in both segments. In addition, the net proceeds
from the Unit Offering allowed the Company to establish increased credit
lines with its vendors.

The Company's gross profit margin increased to 19.9% in fiscal 1995 as
compared to 16.3% in fiscal 1994. The Company believes that this increase
was primarily due to continued manufacturing efficiencies and targeting sales
that produce higher gross profits.

Selling, general and administrative expenses for fiscal 1995 decreased
by 11.9% to $4,149,000 or 17.3% of sales, from $4,709,000 or 22.7% of sales
in fiscal 1994. The decrease was principally due to a reduction in bad debt
expenses of $177,000, a reduction in consulting fees and salaries to former
officers of $245,000, as well as advertising incentives and purchase
discounts of $97,000.

Interest expense was $584,000 for fiscal 1995 as compared to $1,392,000
in the prior year. This decrease was principally due to debt financing
charges of $812,000 on convertible debt and bridge-loan financing in fiscal
1994 which did not reoccur in fiscal 1995.

The increase in the number of shares used to calculate per share amounts
in 1995 results from the number of shares sold in the Unit Offering.
Outstanding options and warrants did not materially dilute earnings per share
in 1995, but could do so in the future if there is a significant increase in
the spread between their exercise price and the quoted market price of the
Company's Common Stock.

Fiscal Year 1994 Compared to Fiscal Year 1993

The Company's net loss for fiscal 1994 was $2,711,000 compared to a net
loss of $858,000 in fiscal 1993.

Consolidated net sales during fiscal 1994 decreased by 22.3% to
$20,746,000 from $26,668,000 during fiscal 1993. In fiscal 1994,
Distribution Operations revenues decreased 22.7% to $8,654,000 from
$11,201,000 and Manufacturing Operations revenues decreased 21.9% to
$12,092,000 from $15,482,000. The Company believes that the reduction in
sales was caused by its continued lack of working capital and weak industry
conditions as well as, to a lesser degree, management's new strategy whereby
the Company focused its manufacturing efforts on products generating higher

<PAGE>

margins as opposed to volume. The lack of adequate working capital caused a
shortage in materials in the manufacturing segment and a lack of available
inventory in the distribution segment. Although the Company received an
availability of an over line credit of $500,000 from its principal lender in
September 1993 and received during the third quarter $990,000 from bridge
loans, these only partially relieved the Company's working capital
deficiency. In April of 1994, the Company received $3,446,000 from its Unit
Offering which significantly alleviated its working capital constraints, but
had little impact on the results of its operations since the money was
received late in the Company's fiscal year.

The Company's gross profit margin increased to 16.3% in fiscal 1994 as
compared to 15.8% in fiscal 1993. The Company believes that this increase is
primarily the result of manufacturing efficiencies and targeting sales that
would result in higher gross profits.

Selling, general and administrative expenses for fiscal 1994, increased
by 6.7% to $4,709,000 or 22.7% of sales, from $4,393,000 or 16.5% of sales,
in fiscal 1993. This was principally due to an increase in consulting fees
and salaries to former officers of $245,000, the cancellation and waiver in
1994 and 1993, respectively, of the deferred compensation agreement with the
Company's President resulting in a $65,000 credit to operations as compared
to a $196,000 credit in the prior year and by a reduction in bad debt expense
of $29,000, which only partially offset the above increases.

Interest expense was $1,392,000 for fiscal 1994 as compared to $719,000
in the prior year. The increase was principally due to debt financing costs
of $812,000 on convertible debt and bridge loan financing, offset by a
reduction of interest charged on short-term borrowings.

Liquidity and Capital Resources

The Company had working capital as of June 30, 1995 of $1,065,000 as
compared to working capital of $1,042,000 as of June 30, 1994. A substantial
portion of the Company's working capital consists of inventory, which was
$4,364,000 and $3,166,000 as of June 30, 1995 and 1994, respectively. The
Company is required to maintain substantial inventories of its numerous
products to meet the immediate requirements of its customers who need
products on short notice and who do not maintain an inventory of such
products.

The Company has a line of credit agreement with Congress which expires
October 1, 1996, whereby the Company may borrow up to $5,750,000, with
interest payable monthly at 2 1/2% above the prime rate, plus an unused line
fee of 1/4% per year. Borrowings under this agreement are limited to 50% of
the Company's eligible inventory up to a maximum of $2,875,000 and 80% of the
Company's eligible accounts receivable. The amounts outstanding at June 30,
1995, and June 30, 1994 were $4,829,000 and $3,184,000, respectively. The
Company had $40,000 available for borrowing at June 30, 1995. The loan is
subject to certain working capital and net worth requirements and is
collateralized by all of the assets of the Company not previously pledged
under other loan agreements. The loan agreement prohibits the payment of
cash dividends by the Company.

In September 1993, the Company received an overadvance of $500,000 from
Congress. In connection therewith, Messrs. A. Densen, L. Densen and A.
Towell obtained a $250,000 junior participation in the loans made to the

<PAGE>

Company from Congress by advancing $250,000 of their funds to Congress.
$250,000 of this overadvance has been repaid to Congress. The balance of
$250,000 will be repaid by Congress, at its option, to Messrs. A. Densen, L.
Densen and A. Towell, subject to the availability of funds.

During April and May 1994, the Company sold in the Unit Offering,
2,300,000 Units, which includes the Unit Underwriter's over-allotment, at
$2.00 per Unit. Each Unit consisted of one share of Common Stock and one
Class A Warrant. Each Class A Warrant entitles the holder to purchase one
share of Common Stock at a reduced exercise price of $1.30 a share through
April 11, 1999. The net proceeds from the Unit Offering were $3,446,000 and
have enabled the Company to return to profitability.

The Company believes that its current working capital position, line of
credit and operations will be sufficient to satisfy its cash needs through
June 30, 1996.

The Company has no material commitments for capital expenditures.

At the present time, the Company, together with a variety of defendants,
is a party to various asbestos-related lawsuits involving a number of
plaintiffs alleging damages from exposure to asbestos products sold by the
Company. The Company may become a party to additional asbestos-related
actions in the future. The Company is also party to a non-asbestos product
liability action. While as indicated, legal and settlement costs to the
Company have not been material to date, the Company cannot, at this time,
determine the outcome of these uncertainties which may have an adverse
effect upon the liquidity of the Company in the future.

Inflation

The impact of inflation on the Company's operations has not been
significant to date. There can be no assurance that a high rate of inflation
in the future would not have an adverse effect on the Company's operations.

<PAGE>
<PAGE>
BUSINESS

General

Eastco Industrial Safety Corp. is a corporation organized and existing
under the laws of the State of New York, having been incorporated on May 15,
1958. The Company, through its wholly-owned subsidiaries, Disposable,
Safety Wear, Puerto Rico Safety Equipment, and Puerto Rico Safety,
manufactures industrial protective clothing products and distributes a wide
range of industrial safety products. The Company's Manufacturing Operations
sells its products to distributors. The Company's Distribution Operations
sells products to "end users," including manufacturing companies and service
businesses, public utilities, fisheries, pharmaceutical plants, the
transportation industry and companies engaged in hazardous materials
abatement.

Manufacturing Operations

Manufactured products are sold under the "Charkate / Worksafe",
"Charkate", "Worksafe" and "COVER-UP" trade names. The Company, through
Disposable, Safety Wear and Puerto Rico Safety Equipment manufactures
disposable and reusable industrial protective apparel. Disposable protective
products items include coveralls, shirts, pants, hats, hoods, aprons, smocks,
lab coats, hazardous material handler suits, examination gowns, sleeves, shoe
covers and related items. Disposable clothing is designed to protect the
user from, among other things, splash, dirt contamination and against a wide
range of hazardous substances. Disposable clothing is made primarily of a
spun bonded polyolefin produced solely by Dupont under the trade name Tyvek .
Reusable industrial protective clothing consists of items for the protection
of various parts of the body which are designed to shield the user from,
among other things, splash, dirt, contamination, heat, fire, cold and the
outside environment. Specific products manufactured include coveralls,
gloves, mitts, shirts, thermal underwear, sleeves, coats, pants, leggings,
spats, bibs, safety vests and a variety of other kinds of protective clothing
and uniforms. The Company also manufactures welding blankets, curtains and
screens.

The Company's Manufacturing Operations and warehousing are located in
Puerto Rico, Alabama and California and are primarily directed from New York.
The Company's products are sold primarily in the United States and Puerto
Rico. The Company sells its manufactured products through sales
representatives. In addition, manufactured products are sold through the
Company's Distribution Operations in the Northeastern region of the United
States and Puerto Rico to "end users."

Distribution Operations

The Company, primarily through Eastco, distributes to "end users"
industrial safety products made by the Charkate / Worksafe division as well
as by non-affiliated companies. These products include hard hats, protective
glasses, ear muffs, ear plugs, respirators, goggles, face shields, rainwear,
protective footwear, first-aid kits, monitoring devices, signs and related
products. These products are sold to manufacturing companies and service
businesses, including public utilities, fisheries, hospitals, pharmaceutical
plants, the transportation industry and companies engaged in hazardous
materials abatement.

<PAGE>

The Company's Distribution Operations are primarily directed from the
Company's offices in New York. The Company also has facilities for
warehousing and distribution of its non-manufactured products in Puerto Rico,
Connecticut and Florida. The Company sells a variety of safety products from
independent manufacturers, including, but not limited to, 3M, Racal Health
and Safety, Inc. and Willson Safety Products, a division of WGM Safety
Corporation. Items distributed are sold primarily in the Northeastern region
of the United States.

Sales and Marketing

The Company utilizes catalogs and telemarketing to aid in its sales
efforts, however, the Company does not engage in any mail-order business nor
sell on a retail basis. Sales are also promoted through trade shows,
mailings and advertising in trade magazines and directories. Sales are
primarily to distributors who sell to "end users" comprised of industrial,
commercial and governmental accounts. The Company considers industrial
accounts to be those businesses which are primarily based upon manufacturing
and production, while commercial accounts are considered by the Company to be
service businesses. The Company also believes that standards established by
OSHA have resulted in a need by others to purchase the Company's products.
The Company employs 10 full-time salesmen in its Distribution Operations who
sell products distributed by the Company, and on a more limited basis,
products manufactured by the Company.

Customers

For the fiscal year ended June 30, 1995, no one company or customer
accounted for more than 10% of the Company's sales. Accordingly, the Company
believes it is not dependent upon any single customer, the loss of any one
would not have an adverse effect on the business of the Company.

Competition

The market for industrial protective clothing and industrial safety
products is extremely competitive. The Company faces competition in all of
its product markets from large, established companies that have greater
financial, managerial, sales and technical resources than the Company, and
some of the Company's product markets are dominated by such larger companies.
Larger competitors also may be able to benefit from economies of scale and
introduce new products that compete with the Company's products.

The Company's primary competitors in its Manufacturing Operations are
Kappler Inc. and Lakeland Industries, Inc., in disposable clothing sales, and
P.G.I., Incorporated; Red Kap, a subsidiary of VF Industries Inc.; Topps Mfg.
Co. and Workrite Uniform Co. in the sale of reusable clothing. Primary
competitors in the manufacture of reusable gloves are Chicago Protective
Apparel, Inc. and Steel Grip, Inc. The Company's major competitors in its
Distribution Operations are Balco Industries, Inc. and Freemont Safety Corp.
in industrial sales, and Insulation Distributions Company, Industrial
Productions Company and Aramsco Company in abatement sales.

Suppliers

The Company is not dependent upon any one company for a source of supply
of raw materials for its manufacturing operations other than DuPont which
supplies the Company with Tyvek a raw material which is used in various

<PAGE>

lines of its disposable products. Products utilizing Tyvek accounted for
approximately 35% and 29% of consolidated sales for the fiscal years ended
June 30, 1995 and June 30, 1994, respectively. Management believes that its
current relationship with DuPont is satisfactory.

Government Regulation

The Company's manufacturing facilities are subject to regulation and
inspection standards established by OSHA. Such facilities have not yet been
inspected for compliance with OSHA. Although the Company believes it is in
material compliance with required standards, there can be no assurance that
any inspection will not reveal that the Company has failed to comply with
OSHA and that, as a result, the Company may be required to expend sums, which
can be costly, to assure compliance with OSHA regulations.

Special Tax Considerations

Puerto Rico Safety Equipment is engaged in manufacturing in Puerto Rico
and was granted an exemption for seventeen (17) years under the Puerto Rico
Industrial Tax Exemption Act of 1963 (the "Industrial Tax Act") with respect
to Puerto Rico income taxes on the production of such items as safety
clothing, protective sleeves, coats, pants, hoods and jackets for the period
commencing January 1, 1970. On July 1, 1989 Puerto Rico Safety Equipment was
granted an extension of its exemption and has a 90% exemption from Puerto
Rico income taxes for the ten-year period ending on June 30, 1999. During
this period, Puerto Rico Safety Equipment has a 75% exemption from Puerto
Rico municipal taxes on its real and personal property utilized in its
operations.

<PAGE>

present rules apply, but to phase out the credit to 60% of the 1994 level,
and further phase down by 5% per year to 40% in 1998 and years thereafter.
Since the credit is a function of future earnings, if any, the effect of such
limitations cannot be determined at the present time. In addition, the
Omnibus Act makes the 100% dividends received deduction subject to the
Alternative Minimum Tax Calculation. No dividends have been declared on the
aggregate undistributed earnings of Puerto Rico Safety Equipment and
Disposable (which through June 30, 1995, aggregates approximately $2,458,000)
and none are intended to be declared because it is management's intention to
reinvest the earnings from such subsidiaries indefinitely. The Company
believes that based upon current operations, the Omnibus Act will not have a
material effect on the Company for the foreseeable future.

As Puerto Rico tax exemptions are reduced or expire, the Company may be
required to pay taxes on income earned in Puerto Rico. The Company is unable
to predict the amount of such impact after such exemptions are reduced or
expire.

Employees

As of September 27, 1995, the Company employed 145 employees in its
Manufacturing Operations and 15 in its Distribution Operations. In addition,
there are 3 executive management employees, and 42 clerical and
administrative personnel. None of the Company's employees are covered by a
collective bargaining agreement and the Company considers its relations with
its employees to be satisfactory.

Properties

The executive offices of the Company are located at 130 West 10th
Street, Huntington Station, New York and are owned by the Company. The
Huntington Property is also used for warehousing and distributing and
contains approximately 25,000 square feet of warehouse space and 5,000 square
feet of office space. As of June 30, 1995, the premises were subject to a
first real estate mortgage due to Associates in the amount of $538,544. The
wives of Messrs. Alan Densen and Anthony P. Towell, executive officers and
directors of the Company and Herbert Schneiderman, a director, are members of
Associates.

The Company's wholly owned subsidiary, Disposable, leases a building
consisting of approximately 45,000 square feet in Aguadilla, Puerto Rico from
the Puerto Rico Industrial Development Company which is used for
manufacturing and warehousing. A lease was entered into for these premises
on February 21, 1995, effective for the ten year period commencing September
1, 1993. Rent for the two year period ending August 31, 1996 is at the
monthly rate of $7,079, which escalates to $13,040.54 in the final year of
the lease.

The Company's wholly owned subsidiary, Safety Wear, occupies
approximately 30,000 square feet in Decatur, Alabama. The premises are
utilized for the cutting and warehousing of coveralls and the manufacturing
of disposable products. The Company pays $6,450 rent per month. The premises
are leased on a month-to-month basis. Should these facilities not be
available to the Company, the Company believes that alternative sites are
available at a comparative cost.

<PAGE>

Legal Proceedings

The Company, in the past, used asbestos in the manufacture of its
products. Such use was terminated by the Company in the mid-1980's. It has
been alleged that asbestos is a cause of cancer, such as asbestosis,
mesothelioma, and other related diseases, the symptoms of which may not
appear for twenty or more years. Since the early 1980's, numerous lawsuits
have been instituted against the Company by persons who have been exposed to
asbestos and asbestos products. Such legal proceedings, for the most part,
are covered by the Company's insurance policies.

During fiscal 1994, the Company reached a settlement pertaining to all
pending and future cases against it in the State of New York brought by one
firm of plaintiffs' attorneys, which firm has been primarily responsible for
bringing asbestos actions against the Company in the State of New York. The
settlement does not apply to Puerto Rico Safety Equipment and is only
applicable to cases brought by the same law firm against the Company in the
State of New York. The Company is to be dismissed without any payment in
cases not involving any exposure to a power generating station in the State
of New York ("Powerhouse"). Where there is Powerhouse exposure, a payment of
$100 is to be made for each alleged nonmalignant case and $300 for each
malignant case. Where plaintiffs consist of two spouses, such is deemed one
case. Payment is to await appropriate documentation of exposure, releases
from the plaintiffs and the agreement of each plaintiff whose case is
settled.

As of June 30, 1995, the Company estimates that it is a party to
approximately 250 cases with respect to exposure to asbestos involving
approximately 480 plaintiffs, of which no cases pertain to Puerto Rico
Safety Equipment. During the quarter ended September 30, 1995, one new action
involving one plaintiff was commenced against the Company. All of the
actions against the Company to date have been brought by non-employees of the
Company and are based upon personal injury claims. The pending actions are
in the Supreme Court of the State of New York, County of New York; Superior
Court of New Jersey, Middlesex County, Law Division; Court of Common Pleas of
Luzerne County, Trial Division of Pennsylvania; and the San Francisco County,
Superior Court of California. The number of first-party plaintiffs include,
in various instances, spouses of said plaintiffs. The actions, with the
exception of one pending action, involve a multitude of defendants. The
complaints allege exposure to asbestos and asbestos products over various
periods of time. Each seeks varying amounts of damages, usually unlimited,
or for each plaintiff as high as $10,000,000 for compensatory damages and
$20,000,000 for punitive damages. The Company may become a party to
additional asbestos actions in the future.

<PAGE>

Equipment) of which all but approximately $25,000 has been paid by the
Company's insurance carriers. The Company has been notified that for actions
terminated subsequent to June 30, 1995, its share of the settlements made
will be approximately $15,000. The foregoing is based upon information
available to the Company to date and assumes certain settlements in the
process of being made and payments to be made thereunder by insurance
companies awaiting documentation from plaintiffs. Through June 30, 1995, the
Company has paid less than $40,000 for legal and defense costs to counsel
appointed by the insurance carriers to defend it. Past results of
settlements and defense costs are not necessarily indicative of future
settlements and defense costs, which the Company is unable to predict.

For the period commencing April 1, 1968 to April 1, 1969 and March 11,
1971 to November 27, 1985, the Company believes that it has various policies
of primary insurance in different amounts which would protect it against
liability for asbestos-made, product-related personal injuries. The policies
range in amounts from $50,000 to $1,000,000. The Company also believes that
since August 10, 1972 to on or about August 11, 1986 it has had various
policies for excess coverage applicable to asbestos claims. These policies
range in amounts from $500,000 to $10,000,000 for excess coverage. There are
gaps of approximately six weeks in the primary coverage between March 11,
1971 to November 27, 1985 and approximately thirty-six months in the excess
coverage between August 10, 1972 and August 11, 1986. The policies of
insurance are not applicable to all of the subsidiaries of the Company, which
have varying coverage, and such subsidiaries may also be without coverage for
various times of their doing business. Not all of these policies are in the
possession of the Company. Reference is made to Risk Factor 6 regarding the
liquidation of certain of the Company's insurance carriers with respect to
excess product liability coverage.

Effective June 26, 1990, an agreement between Eastco and its primary
insurance carriers dated March 26, 1990 became effective. Eastco entered
into this agreement in an effort to resolve uncertainties as to its insurance
coverage which will cover asbestos claims against the parent Company where
any exposure to asbestos is alleged during the period 1971 to 1985,
inclusive. Pursuant to this agreement, the Company is obligated to share in
the payment of asbestos-related claims against Eastco. Pursuant to the
agreement, the Company is obligated to pay 12% of all attorneys' fees
incurred on its behalf and 17% of indemnity costs (which include judgment and
settlement amounts). The balance of these costs are to be paid by the
insurance carriers, which are parties to the agreement. The agreement is
subject to policy limitations of each insurance policy. The agreement may be
terminated at any time upon ninety (90) days' notice by any of the parties
provided that termination may not be effective as to any asbestos action that
has already been placed on the trial calendar, unless it has a scheduled
trial date more than twelve (12) months from the date the notice of
termination is given. The Company has been advised that no pending cases are
on the trial calendar.

Effective during May, 1991, the Company entered into a Settlement
Agreement and Release with Mount Vernon Fire Insurance Company. Pursuant to
this Agreement, the Company discontinued its action against Mount Vernon,
which agreed that, subject to the terms of the Agreement, Mount Vernon would
reimburse the Company (where applicable) for 6.25% of attorneys' fees (52.08%
of the Company's 12% share referred to in the agreement in the previous
paragraph) and 6.25% of indemnification costs (36.76% of the Company's 17%
share referred to in the agreement in the previous paragraph). The Agreement

<PAGE>

is not applicable to any asbestos actions against the Company where no
exposure is alleged to products manufactured or distributed by Eastco between
April 1, 1968 and April 1, 1969. The Agreement may be terminated at any time
upon 90 days' notice, but such notice is not applicable to asbestos actions
placed on a trial calendar, unless such has a trial date more than twelve
months from the date the notice of termination is given. The agreement
provides that the limit available under the policy is $100,000 plus
attorneys' fees while the agreement is in effect and is applicable only to
Eastco. Approximately $14,000 has been reimbursed by Mount Vernon Fire
Insurance Company as of June 30, 1995 for indemnification.

An action entitled Michael F. Cilone and Marie Cilone v. Willson Safety
Products, Inc., Standard Coating Corporation, National Paint Co., Inc., E.I.
Dupont De Nemours & Co Inc., Orb Industries, Inc., PPG Industries Inc., Olde
England Paint & Varnish Corp., Oatey Co., d/b/a Bond Tight Products, Eastco
Industrial Safety Corp. was instituted on September 19, 1988 in the Supreme
Court of the State of New York, County of Kings. The Company has referred
this matter to its insurance carriers applicable to the period 1984 to 1986
and who have provided primary insurance on an annual basis of $1,000,000 per
year in addition to applicable excess carriers. The complaint alleges four
causes of action, including one for punitive damages on behalf of Michael F.
Cilone, against the Company in the amount of $5,000,000 each and one cause of
action for $500,000 on behalf of Marie Cilone. The complaint alleges that
the Company sold respirators made by Willson Safety Products and other safety
equipment to Michael F. Cilone's employer, the New York City Transit
Authority, between 1984 and 1986 and that he sustained injuries as a result
of chemicals and various materials made by the other defendants. The Company
has been advised by counsel, designated by its insurance carriers to defend
it, that the insurance in effect should be ample with respect to any
settlement contribution and / or liability allocation by a jury. This is
based upon the present status of the case and the fact that depositions have
not yet all been completed.

<PAGE>
MANAGEMENT

Directors and Officers

The directors and executive officers of the Company are as follows:

Name Age Position
- ---------------- --- -------------------------
Alan E. Densen 61 President and Chief
Executive Officer and
Director

Lawrence Densen 37 Senior Vice President and
Director

Anthony P. Towell 64 Vice President of
Finance, Secretary,
Treasurer, Chief
Financial Officer and
Director

Dr. Martin Fleisher 58 Director

James Favia 61 Director

Herbert Schneiderman 64 Director

The term of office of the following directors does not expire until the
Company's 1995 annual meeting and when their successors are chosen:

Dr. Martin Fleisher
James Favia
Herbert Schneiderman

The term of office of the following directors does not expire until the
Company's 1996 annual meeting and when their successors are chosen:

Alan E. Densen
Lawrence Densen
Anthony P. Towell

Alan E. Densen has been President, Chief Executive Officer and a
director of the Company since 1958 (except for the period September 1993 to
January 1994, when he served as its Senior Vice President). He was also
Treasurer and Chief Financial Officer of the Company through 1992.

Lawrence Densen, Senior Vice President and director of the Company, has
been a Vice President and a director of the Company since 1986.

Anthony P. Towell has been the Company's Vice President of Finance,
Treasurer, and Chief Financial Officer since 1992, its Secretary since 1993,
and from 1989 to 1992 its Vice President. He has been a director of the
Company since 1989. He was a director of New York Testing Laboratories, Inc.
("NYT"), a laboratory testing company and manufacturer of automotive
accessories, from 1988 to 1995. In addition, he has been a director since
1988 of Nytest Environmental Inc. ("Nytest"), a hazardous waste testing

<PAGE>

company. Mr. Towell has also been a director, since 1991, of Ameridata
Technologies, Inc. ("Ameridata"), a provider of computer products and
services. The common stock of Nytest and Ameridata are registered under
Section 12(g) and (b), respectively, of the Securities Exchange Act of 1934.

Dr. Martin Fleisher, who holds a Ph.D. in biochemistry from New York
University, has been attending clinical chemist at Memorial Sloan-Kettering
Cancer Center since 1967. He has been a director of the Company since 1989.
He devotes only a limited portion of his time to the business of the Company.

James Favia is a consultant to Donald & Co. who acts as the Company's
investment advisor. He is a chartered financial analyst and has an MBA in
finance which he obtained from New York University in 1959. He became a
director of the Company on July 26, 1995. He was a director of T.J. Systems
until November, 1994. The common stock of T.J. Systems is registered under
Section 12(g) of the Securities Exchange Act of 1934. He devotes only a
limited portion of his time to the business of the Company.

Herbert Schneiderman is President of the Casablanca Group, L.P., a
manufacturer of diversified women's sportswear. He became a director of the
Company on July 26, 1995. He devotes only a limited portion of his time to
the business of the Company.

Committees of the Board of Directors

The Board of Directors has established a Compensation Committee, a Stock
Option Committee and an Audit Committee. The Compensation Committee consists
of Messrs. Fleisher, Favia and Schneiderman. The purpose of the Compensation
Committee is to review the Company's compensation of its executives, to make
determinations relative thereto and to submit recommendations to the Board of
Directors with respect thereto.

The Stock Option Committee consists of Messrs. Fleisher, Favia and
Schneiderman. The purpose of the Stock Option Committee is to select the
persons to whom options to purchase shares of the Company's Common Stock
under the 1994 Incentive Stock Option Plan and to make various other
determinations with respect to such plans.

The Company has an Audit Committee consisting of Messrs. Towell, Favia
and Schneiderman. The purpose of the Audit Committee is to provide general
oversight of audit, legal compliance and potential conflict of interest
matters.
<PAGE>
<PAGE>

Executive Compensation

The following describes the components of the total compensation of the
CEO of the Company. No executive, other than the CEO, had a total annual
salary and bonus for the three years ended June 30, 1995 which exceeded
$100,000.

Summary Compensation Table

Annual Compensation Long term compensation
------------------------ --------------------------------------
Awards Payouts
------------------ -----------------
Other Securities All
Name and annual Restricted underlying LTIP other
principal Salary Bonus compen- stock options / payouts compen
position Year ($) ($) sation($) award(s)($) SARs (#) ($) sation($)
- -------- ---- ------ ----- ---------- --------- ---------- ------ --------
Alan E. 1995 107,930 -0- 30,0783(3) -0- 420,000(2) -0- -0-
Densen, 1994(1) 117,154 -0- 30,0783(3) -0- -0- -0- -0-
CEO 1995 169,920 -0- 30,0783(3) -0- -0- -0- -0-

(1) From September, 1993 to January, 1994, Mr. Densen was not CEO; he served
as Senior Vice President.

(2) Includes an incentive stock option granted January 20, 1995 to acquire
20,000 shares at $1.0625 as well as a non qualified stock option to
acquire 400,000 shares exercisable at $1.0625 per share, the closing
market price on such date, each exercisable until January 19, 2005. The
non-qualified option can not be exercised during the first five years
unless (a) the audited pre-tax profits for fiscal 1995 are greater than
$50,000, then options to acquire 200,000 shares of Common Stock may be
exercised and (b) the audited pre-tax profits for fiscal 1996 are
greater than $250,000, then options to purchase the remaining 200,000
shares of Common Stock may be exercised. It was determined in September
1995 that this option can now be exercised for 200,000 shares of Common
Stock.

(3) Primarily includes life insurance premiums on the life of Alan E. Densen
owned by Mr. Densen's wife and paid for by the Company.

Stock Options

OPTION/SAR GRANTS IN LAST FISCAL YEAR
[Individual Grants]

Number of Percent of
securities total options /
underlying SARs granted Exercise
Options/SARs in fiscal or base Expiration
Name granted (#)(1) year (1) price ($/Sh) Date
- ----- -------------- -------------- ------------- -----------
Alan E. 20,000 23.5% 1.0625 1/19/05
Densen,
CEO 400,000 33.3% 1.0625 1/19/05

(1) See note (2) above in the Summary Compensation Table.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

Number
of securities Value
underlying unexercised in-
unexercised the-money options
Shares SARs at FY-end (#) SARs at FY-end($)
acquired on Value exercisable / exercisable /
Name exercise (#) realized ($) unexersisable unexercisable(1)
- ----- -------------- -------------- ------------- ----------------
Alan E. -0- -0- -0-/20,000 -0-/13,750
Densen,
CEO -0- -0- 200,000/200,000 137,500/137,500

(1) See footnote (2) above in the Summary Compensation Table.

Employment Agreements

As of July 1, 1995, Alan E. Densen entered into a new employment
agreement replacing an earlier employment agreement which commenced as of the
effective date of the Company's Unit Offering. A copy of this employment
agreement is annexed to the Registration Statement of which this Prospectus
forms a part. The employment agreement with Alan E. Densen provides for him
to serve as the Company's President for a term of five years. At the end of
each fiscal year during the term of the agreement, the agreement is
automatically extended for one additional year to be added at the end of the
then current term of the agreement, unless the Board of Directors determines
to the contrary. The base annual salary is $125,000 for fiscal 1996 which
shall be increased at the beginning of each fiscal year commencing July 1,
1996, at the discretion of the Board of Directors. Each increase is not to
be less than 10% of the minimum compensation paid to the employee in the
prior fiscal year. Mr. Densen is also eligible to receive an annual bonus
equal to 3 1/3% of the Company's earnings before interest and taxes for the
fiscal year ended June 30, 1996 and each fiscal year thereafter during the
term of the agreement. The bonus is to be paid within 30 days of the
completion of the Company's audited financial statement for each fiscal year
and is to be paid in cash or registered shares of common stock of the
Company. In addition, Mr. Densen is entitled to receive reimbursement of
ordinary and necessary business expenses, a monthly automobile allowance of

<PAGE>

$700 and disability, medical, hospitalization, and life insurance.

The employment agreement entered into by Alan E. Densen includes
provisions that provide for his right to terminate the agreement and thereby
receive additional compensation, as provided below, in the event that he is
not elected or retained as President and a director of the Company; the
Company acts to materially reduce his duties and responsibilities under the
agreement; the Company changes the geographic location of his duties to a
location from the New York metropolitan area; his base compensation is
reduced by 10% or more; any successor to the Company fails to assume the
agreement; any other material breach of the agreement which is not cured by
the Company within 30 days; and a "Change of Control" by which a person,
other than a person who is an officer and/or director of the Company as of
the effective date of the agreements, or a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner
of 20% or more of the combined voting power of the then outstanding
securities of the Company. In the event that Alan E. Densen terminates his
position because of any of the aforesaid reasons other than a "Change of
Control", or if the Company terminates his employment in any way that is a
breach of the agreement by the employer, Mr. Densen shall be entitled to
receive, in addition to his salary continuation, as a bonus, a cash payment
equal to his total base salary plus projected expenses and bonuses for the
remainder of the term thereof, payable within 30 days of termination and all
stock options, warrants and other stock appreciation rights granted by the
Company to him shall become immediately exercisable at an exercise price of
$0.10 per share. In the event that he owns or is entitled to receive any
unregistered securities of the Company, than the Company shall register such
securities within 120 days of his termination. In the event that there is a
"Change of Control", he shall be paid within 30 days thereof a one-time bonus
equal to his total minimum base salary for the next three years and he shall
be immediately reimbursed for all amounts not yet received for his
participation in a total of $250,000 of junior participation with Congress in
loans to the Company made during September 1993, without regard to whether
such amount is currently due pursuant to the terms thereof.

Compensation to Directors

No compensation is paid to directors for their serving solely as a
director. Outside directors are compensated at the rate of $500 for each
board of directors meeting which they attend in person.

Indemnification of Directors and Executive Officers

The Company's Certificate of Incorporation provides that the Company
shall, to the fullest extent permitted by Section 722 of the Business
Corporation Law of the State of New York, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and
the indemnification provided for herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any By-Law,
agreement, vote of stockholders or disinterested Directors or otherwise.
Section 722 of the Business Corporation Law of the State of New York contains
provisions entitling directors and officers of the Company to indemnification
from judgments, fines, amounts paid in settlement and reasonable expenses,
including attorney's fees, as the result of an action or proceeding in which
they may be involved by reason of being or having been a director or officer

<PAGE>

of the Company provided said officers or directors acted in good faith, the
acts were not the result of deliberate dishonesty, and that the indemnitee
does not personally gain or profit where not legally entitled to do so.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is therefor
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities
being registered, the Company 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 Securities Act and is therefore
unenforceable and will be governed by the final adjudication of such issue.

INCENTIVE STOCK OPTION PLANS

1983 Plan

In June 1983, the Company instituted its 1983 Stock Option Plan (the
"1983 Plan"). The 1983 Plan, terminated on June 23, 1993, and 8,654 options
remain outstanding as of the date of this Prospectus.

1992 Plan

In December 1992, the Board of Directors and the shareholders of the
Company adopted the Company's 1992 stock option plan (the "1992 Plan"). The
1992 Plan provides incentives in the form of incentive stock options
("ISO's") and reserved 200,000 shares for issuance. As of the date of this
Prospectus, 3,000 ISO's are outstanding under the 1992 Plan. The Company has
agreed not to issue any further options under the 1992 Plan.

1994 Plan

In January, 1994, the Board of Directors adopted the Company's 1994
stock option plan (the "1994 Plan"), which was approved by the shareholders
of the Company on December 15, 1994. The 1994 Plan provides for the issuance
of up to 100,000 ISO's and will be administered, until it terminates ten
years after its effective date, by the Stock Option Plan Committee or any
other committee (the "Committee") appointed by the Board of Directors.

ISO's may be granted to key employees, including officers of the
Company, at the discretion of the Committee, until termination of the 1994
Plan. No ISO may be granted under the 1994 Plan for a term in excess of ten
years from the date of grant. The price of the ISO's shall be determined by
the Committee, except that the price shall not be less than 100% of the fair
market value of the Company's Common Stock on the date of the grant, and in
the case of an individual owning more than ten percent of the total combined
voting power of the Common Stock (the "10% shareholder"), the price shall not
be less than 110% of the fair market value of the Common Stock on the date of
grant. ISO's granted under the 1994 Plan are exercisable immediately, or in
one or more installments at such times and upon such conditions as may be

<PAGE>

determined by the Committee, except that in the event of a "Change of
Control" of the Company as that term is defined in the Plan, all ISO's are
immediately exercisable. Employees may not be granted ISO's under the Plan
which are first exercisable during any one calendar year to the extent that
the fair market value of the Common Stock exceeds $100,000 (determined as of
the time that the ISO's are first granted).

As of the date of this Prospectus, 85,000 ISO's are outstanding under
the 1994 Plan.

Reference is made to note 7 of the Consolidated Financial Statements.

The Company also anticipates submitting, to its shareholders at its next
annual shareholders meeting, proposals to increase the number of options
issuable under the Company's 1994 Incentive Stock Option by an additional
550,000 shares and to adopt a Non-qualified Option Plan for 350,000 shares.

<PAGE>
<PAGE>
PRINCIPAL SHAREHOLDERS

The following are known by the Company, as of the date hereof, to be the
beneficial owners of more than five percent of Common Stock:

Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Owner of Class
- -------------- ------------------- ------------------- -----------
Common Stock Alan E. Densen 309,688(1)(4) 8.0%
$.12 par value 130 West 10th Street
Huntington Station, NY

Common Stock Lawrence Densen 251,813(2)(4) 6.5%
$.12 par value 130 West 10th Street
Huntington Station, NY

Common Stock Anthony P. Towell 676,667(3)(4) 15.9%
$.12 par value 130 West 10th Street
Huntington Station, NY

(1) Includes a warrant, held by Mr. Densen's wife, to acquire 16,667 shares
of Common Stock granted June 30, 1992, which expires April 11, 1999 and
is exercisable at $1.30 per share.

(2) Includes 7,000 Class A Warrants; an incentive stock option to acquire
6,250 shares of Common Stock granted December 18, 1986 which expires
December 17, 1996 at an exercise price of $2.6664 per share; incentive
stock options to acquire 563 shares of Common Stock granted June 1, 1988
which expires May 31, 1998 at an exercise price of $3.00 per share; an
incentive stock option to acquire 20,000 shares of Common Stock granted
January 20, 1995 which expires January 19, 2005 and is exercisable at
$1.0625 per share.

(3) Includes 15,000 Class A Warrants; 400,000 Towell Warrants; an incentive
stock option to acquire 20,000 shares granted January 20, 1995 which
expires January 19, 2005 and is exercisable at $1.0625 per share.

(4) On January 20, 1995, there was granted to Messrs. A. Densen, A. Towell
and L. Densen a non-qualified option to acquire 400,000 shares each
exercisable until January 19, 2005 at an exercise price of $1.0625, the
closing market price of the Common Stock on the date of grant. These
options were granted in consideration of previous sacrifices including
reduction in salaries, cancellation of options and other surrendered
benefits by such executive officers as well as the turnaround
performance achieved by the Company. The turnaround achieved by the
Company in its performance can be directly related to the efforts of
Messrs. A. Densen, A. Towell and L. Densen. These options can not be
exercised during the first five years unless (a) the audited pre-tax
profits for fiscal 1995 are greater than $50,000, then options to
acquire 200,000 shares of Common Stock may be exercised and (b) the
audited pre-tax profits for fiscal 1996 are greater than $250,000, then
options to purchase the remaining 200,000 shares of Common Stock may be
exercised. It was determined in September 1995 that these options can
now be exercised for 200,000 shares of Common Stock and such 200,000
shares are included in the above table for each individual.
<PAGE>
<PAGE>

Common Stock owned by the Company's directors and executive officers of
the Company as a group:

Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Owner of Class
- ------------------- --------------------- --------
Alan E. Densen 309,688(1) 8.0%
130 West 10th Street
Huntington Station, NY

Lawrence Densen 251,813(2) 6.5%
130 West 10th Street
Huntington Station, NY

Anthony P. Towell 676,667(3) 15.9%
130 West 10th Street
Huntington Station, NY

Dr. Martin Fleisher 10,833(4) *
130 West 10th Street
Huntington Station, NY

James Favia 20,000(5) *
130 West 10th Street
Huntington Station, NY

Herbert Schneiderman 38,333(6) 1.1%
130 West 10th Street
Huntington Station, NY

All officers and directors
as a group (6 persons) 1,307,334 27.4%
________________
* Less than 1%.
(1) See footnote (1) in the preceding chart.
(2) See footnote (2) in the preceding chart.
(3) See footnote (3) in the preceding chart.
(4) Includes stock options to acquire 10,833 shares of Common Stock.
(5) Includes stock options to acquire 10,000 shares of Common Stock.
(6) Includes warrants and stock options to acquire 18,333 shares of Common
Stock.

<PAGE>
<PAGE>
DESCRIPTION OF SECURITIES

Common Stock

The authorized capital stock of the Company is 20,000,000 shares of
Common Stock, $0.12 par value per share. The holders of Common Stock (i) have
equal ratable rights to dividends from funds legally available, therefore,
when, as and if declared by the Board of Directors of the Company; (ii) are
entitled to share ratably in all of the assets of the Company available for
distribution to holders of Common Stock upon liquidation, dissolution or
winding up of the affairs of the Company; (iii) do not have preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions applicable thereto; and (iv) are entitled to one vote per share on
all matters on which shareholders may vote at all meetings of shareholders.

The holders of shares of Common Stock of the Company do not have
cumulative voting rights, which means that the holders of more than 51% of
such outstanding shares voting for the election of Directors can elect all of
the Directors to be elected, if they so choose, and, in such event, the
holders of the remaining shares will not be able to elect any of the
Company's Directors.

Warrants

Class A Warrants

The Class A Warrants have been issued pursuant to an agreement (the
"Warrant Agreement") between the Company and American Stock Transfer and
Trust Co., as warrant agent (the "Warrant Agent") dated April 12, 1994. The
following discussion of certain terms and provisions of the Class A Warrants
is qualified in its entirety by reference to the detailed provisions of the
Warrant Agreement and the Class A Warrant certificates, the forms of which
have been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.

Each Class A Warrant entitles its holder to purchase one share of Common
Stock at an exercise price of $1.30 per share. At the time of issuance the
exercise price of the Class A Warrants was $2.40 per share and was reduced to
the present exercise price of $1.30 on January 31, 1995. The Class A
Warrants expire on April 11, 1999. The Class A Warrants may be redeemed by
the Company at any time at a redemption price of $.10 per Warrant upon 30
days prior written notice, provided the closing high bid price of the Common
Stock for 10 consecutive trading days ending on the third day prior to the
date of the notice of redemption equals or exceeds $1.95 (150% of the then
exercise price of the Class A Warrants) per share. Holders of Class A
Warrants shall have exercise rights until the close of business on the day
preceding the date fixed for redemption.

In order for a holder to exercise a Class A Warrant, and as required in
the Warrant Agreement, there must be a current registration statement on file
with the Commission pertaining to the shares of Common Stock underlying the
Class A Warrants, and such shares must be registered or qualified for sale
under the securities laws of the state in which such warrantholder resides or
such exercise must be exempt from registration in such state. The Company
will be required to file post-effective amendments to the Registration
Statement of which this Prospectus forms a part during the nine-month period
from the date hereof or when events require such amendments. In addition, the

<PAGE>

Company has agreed with the Unit Underwriter to use its best efforts to keep
the Registration Statement covering the shares underlying the Class A
Warrants current and effective. There can be no assurance however, that such
Registration Statement (or any other Registration Statement filed by the
Company to cover shares of Common Stock underlying the Class A Warrants) can
be kept current. If a Registration Statement covering such shares of Common
Stock is not kept current for any reason, or if the shares underlying the
Class A Warrants are not registered in the state in which a holder resides,
the Class A Warrants will not be exercisable and will be deprived of any
value.

Holders of the Class A Warrants will be protected against dilution upon
the occurrence of certain events, including, but not limited to stock
dividends, stock splits, reclassifications and mergers. However, holders of
the Class A Warrants will have no voting rights and will not be entitled to
dividends. In the event of liquidation, dissolution or winding up of the
Company, holders of Class A Warrants will not be entitled to participate in
any distribution of the Company's assets.

The purchase price payable upon exercise of the Class A Warrants is to
be paid in lawful money of the United States. The Company is not required to
issue certificates representing fractions of shares of Common Stock upon the
exercise of Class A Warrants, but with respect to any fraction of a share, it
will make payment in cash based upon the market price of the Common Stock as
determined by the Warrant Agent.

Towell Warrants

On June 29, 1993, the Company borrowed $325,000 from Scorpio in the form
of a convertible subordinated note, payable on June 30, 1997 (the "Scorpio
Loan") which has since been repaid by the Company from the Unit Offering. In
connection with the Scorpio Loan, the Company sold to Scorpio for $25,000
warrants to purchase 400,000 shares of the Company's Common Stock at $2.00 a
share (which was subsequently sold to Anthony P. Towell in January 1994) and
is herein referred to as the Towell Warrants. The Towell Warrants were
purchased from Scorpio for $200,000. The shares issuable upon exercise of the
Towell Warrants were originally subject to a 24 month lock-up, which was
terminated pursuant to the Company's termination of its relationship with the
Unit Underwriter on July 10, 1995. The exercise price of the Towell
Warrants were reduced to $1.30 per share on January 31, 1995 and the Towell
Warrants were extended through April 11, 1999. See "Certain Transactions."

West 10th Street Warrants

On June 30, 1992, a group of investors acquired the mortgage on the
Huntington Property with a balance of approximately $962,000 and $500,000 of
subordinated debt from a bank for $650,000. Such group also acquired a second
lien on all of the Company's assets. The group entered into a modification of
indebtedness agreement which reduced the mortgage to $650,000 and forgave the
balance. In connection with the transaction, the Company also issued
five-year warrants to acquire 108,333 shares of Common Stock at $3.00 a
share. The exercise price of the West 10th Street Warrant was reduced to
$1.30 per share and were extended through April 11, 1999 on January 31, 1995.
The wives of Messrs. Alan E. Densen and Anthony P. Towell, executive
officers and directors of the Company and Herbert Schneiderman, a director of
the Company, are members of Associates. The wives of Messrs. A. Densen and
A. Towell each own West 10th Street Warrants to purchase 16,667 of such

<PAGE>

shares. Herbert Schneiderman owns 8,333 West 10th Street Warrants. See
"Certain Transactions."

Transfer Agent, Warrant Agent and Registrar

The Transfer Agent, Warrant Agent and Registrar for the Common Stock and the
Class A Warrants is American Stock Transfer and Trust Co., 40 Wall Street,
New York, New York.

SELLING STOCKHOLDERS

The following table sets forth the number of shares of Common Stock of
the cm beneficially owned by each Selling Stockholder and the number of
shares included for sale in this Prospectus.

Beneficial Ownership Beneficial Ownership
of shares of Common of shares of Common
Selling Stockholders Stock prior to Sale(2) Stock after Sale (2)
- --------------------- ---------------------- --------------------

Anthony P. Towell(1) 676,667 245,000
Charles Holzberg 4,167 *
Rita Lava 4,167 *
Herbert Schneiderman(1) 38,333 *
Fred Switzman, DDS P.C.,
Employees retirement
Plan Trust 4,167 *
John Maloney 8,333 *
Rae Ann Seidman 7,500 *
Maxine Turitz 18,500 *
Kevin Denninger 19,167 *
Mark J. Fredericks 4,167 *
Alice Densen(1) 309,688 293,021
Jacqueline Towell(1) 676,667 245,000
Hollenberg Levin Solomon
Ross & Belsky, LLP
Profit Sharing Plan f/b/o
Herbert W. Solomon 4,167 *
Hollenberg Levin Solomon
Ross & Belsky, LLP
Profit Sharing Plan f/b/o
N. Barry Ross 4,167 *
Rowen Enterprises 8,333 *
Arlyn Lumber Products
Corp. Profit Sharing Plan 4,167 *
Imperial Pension Trust 4,167 *
_______________

* Less than 1% of the outstanding shares of Common Stock of the Company.

(1) Anthony P. Towell is a director and an executive officer of the Company.
Jacqueline Towell is the wife of Anthony P. Towell. Alice Densen is the
wife of Alan E. Densen who is a director and an executive officer of the
Company. Herbert Schneiderman is a director of the Company. See
"Management" and "Principal Shareholders" with respect to the positions

<PAGE>

Messrs. Towell, Densen and Schneiderman and their beneficial ownership
of Common Stock prior to the Offering.
(2) Assumes shares issuable upon the exercise of Warrants.

PLAN OF DISTRIBUTION

This Offering is made by the Company in connection with the exercise of
outstanding Class A Warrants to purchase shares of the Company's Common Stock
which Class A Warrants were previously sold to the public as part of Units in
the Company Unit Offering by the prospectus dated April 11, 1994. There are
currently issued and outstanding 2,770,833 Warrants (includes 2,262,500 Class
A Warrants, 400,000 Towell Warrants and 108,333 West 10th Street Warrants),
all of which may be exercised to purchase the Company's Common Stock pursuant
to this Offering. There is no minimum number of shares which must be
purchased upon the exercise of the Warrants except that one Warrant is
required to purchase one share of Common Stock and no fractional shares will
be issued. There are no arrangements to escrow any of the funds to be paid
in connection with the exercise of the Warrants. All payments made pursuant
to the exercise of the Warrants will be made directly to the Company and may
be used by the Company immediately upon receipt.

A registered holder may exercise his or her Warrants by surrendering the
certificate representing the Warrants together with a Warrant exercise form
on the Warrant certificate properly completed and signed with full payment of
the exercise price payable to the Company. Warrants may be exercised in
whole or in part. If Warrants are exercised in part, a new Warrant
certificate will be issued for the remaining number of shares. No fractional
shares will be issued upon the exercise of Warrants. Rather, they will be
settled for cash. All payments must be received by the Company prior to the
expiration date or the redemption date established by the Company and
Warrants not exercised prior to the expiration date shall expire.

The original exercise price of $2.40 per share for each Class A Warrant
was arbitrarily determined by the Company in negotiation with the Unit
Underwriter in the Company's Unit Offering and the price bears no
relationship to the Company's assets, earnings, book value or to any other
established criteria of value. Thus, the exercise prices of the Warrants
should not be considered an indication of the actual value of the Company.
Therefore, holders of Warrant are subject to an increased risk that the
prices of the Company's securities have been arrived at arbitrarily. See
"Risk Factors". See "Certain Transactions" regarding the reduction of the
exercise price of the Warrants to $1.30 per share and the extension of their
term through April 11, 1999.

SHARES ELIGIBLE FOR FUTURE SALE

Of the 3,614,883 shares of Common Stock of the Company outstanding as of
the Effective Date, 146,021 shares are restricted securities, as that term is
defined in Rule 144 promulgated under the Securities Act. Absent
registration under the Securities Act, the sale of such shares is subject to
Rule 144, as promulgated under the Securities Act. In general, under Rule
144, subject to the satisfaction of certain other conditions, a person,
including an affiliate of the Company, who has beneficially owned restricted
shares of Common Stock for at least two years is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1%
of the total number of outstanding shares of the same class or, if the Common
Stock is quoted on NASDAQ, the average weekly trading volume during the four

<PAGE>

calendar weeks preceding the sale. A person who has not been an affiliate of
the Company for at least three months immediately preceding the sale and who
has beneficially owned the shares of Common Stock for at least three years is
entitled to sell such shares under Rule 144 without regard to any of the
volume limitations described above. No assurance can be made as to the
effect, if any, that sales of shares of Common Stock or the availability of
such shares for sale will have on the market prices prevailing from time to
time. Nevertheless, the possibility that substantial amounts of Common Stock
may be sold in the public market may adversely affect prevailing market
prices for the Common Stock and could impair the Company's ability to raise
capital in the future through the sale of equity securities.

CERTAIN TRANSACTIONS

During September, 1993 the Company's lender, Congress, agreed to provide
an over advance to the Company of $500,000. In connection therewith, Messrs.
A. Densen, L. Densen and A. Towell obtained a $250,000 junior participation
interest from Congress by advancing $250,000 of their funds to Congress.
$250,000 of this over advance was repaid to Congress during fiscal 1994. The
balance of $250,000 will be repaid by Congress, at its option, to Messrs. A.
Densen, L. Densen and A. Towell, subject to the availability of funds.

Associates holds a first mortgage on the Huntington Property in the
principal amount of $538,544 as of June 30, 1995. The wives of Alan E.
Densen and Anthony P. Towell, executive officers and directors of the
Company, and Herbert Schneiderman, a director of the Company are members of
Associates. During the year ended June 30, 1995, the Company paid Associates
$121,108 in principal and interest on the mortgage.

See note 4 in "Principal Shareholders" regarding non-qualified options
granted to Messrs. A. Densen, L. Densen and A. Towell on January 20, 1995 to
acquire 400,000 shares each, exercisable until January 19, 2005 at an
exercise price of $1.0625 per share, the closing market price of the
Company's Common Stock on the date of grant.

On January 31, 1995, the Company's board of directors reduced the
exercise price of the 2.3 million outstanding Class A Warrants issued in
connection with the Unit Offering to $1.30 per share. At the same time, the
board of directors also reduced the exercise price to $1.30 per share with
regard to the 108,333 West 10th Street Warrants issued to members of
Associates, including the spouses of Alan Densen (16,667 West 10th Street
Warrants owned by her) and Anthony P. Towell (16,667 West 10th Street
Warrants owned by her), and to Herbert Schneiderman (8,333 West 10th Street
Warrants owned by him), 400,000 Towell Warrants purchased by Anthony P.
Towell, the Company's Chief Financial Officer, from Scorpio, 40,782 Royce
warrants issued in connection with a 1991 public offering and 8,333 warrants
in connection with a 1991 bridge loan. All these warrants have also been
extended to April 11, 1999. These warrants were all adjusted as indicated so
as to treat them on an equal basis and to provide incentives for them to be
exercised.

The Company had employment agreements with Messrs. A. Densen, A. Towell
and L. Densen, which commenced as of the effective date of the Company's Unit
Offering in April, 1994. As of July 1, 1995, these executive officers
entered into new agreements. Copies of the new agreements are annexed to the
Registration Statement of which this Prospectus forms a part. See "Executive

<PAGE>

Compensation - Employment Agreements" with regards to provisions contained in
the employment agreement of Alan E. Densen, the Company's President and CEO.
Similar provisions are contained in each of the employment agreements with
Anthony P. Towell and Lawrence Densen. See also note 8 to the Consolidated
Financial Statements.

On July 10, 1995, the Company terminated its relationship with the Unit
Underwriter, the Company's underwriter in its Unit Offering. Pursuant to an
agreement dated July 10, 1995, the Company canceled all of the Unit
Underwriter's rights under the Underwriting Agreement in connection with the
Unit Offering, including, but not limited to, the right of first refusal to
act on behalf of the Company in future transactions, the cancellation of all
Underwriter's Warrants held by it or its affiliates, their right to
representation on the Company's board of directors and the termination of any
obligation by holders of securities subject to a "lock-up" to obtain the
permission of the Unit Underwriter prior to sale or other disposition of said
securities. The Unit Underwriter also had a prior right to a solicitation
fee of 5% of the aggregate exercise price of the Class A Warrants in certain
events, which right was also canceled pursuant to this agreement. At the same
time, Leonard A. Neuhaus and Sheldon Lieberbaum, who are affiliated with the
Unit Underwriter, resigned as directors of the Company. In exchange, the
Company issued 100,000 shares of common stock to the Unit Underwriter and has
agreed to register these shares with the Securities & Exchange Commission by
October 31, 1995 or to issue an additional 50,000 shares and register all of
the shares if such registration statement is not filed by said date.

On April 18, 1995, the Company entered into an agreement with Donald &
Co. Securities Inc. ("Donald") to act as its investment adviser for a term of
three years at a retainer of $3,000 per month. The agreement may be
terminated for cause at any time and after eighteen (18) months by either
party upon forty-five days notice. Donald was also granted a five year
warrant to purchase 125,000 shares exercisable at $1.25 per share, the
closing market price on the date of grant. James Favia, a director of the
Company, serves as a consultant to Donald. The Company anticipates
registering the shares issuable upon the exercise of the warrants issued to
Donald.

LEGAL MATTERS

Certain legal matters with respect to the issuance of the securities
offered hereby will be passed upon for the Company by Hollenberg Levin
Solomon Ross & Belsky, LLP, 585 Stewart Avenue, Garden City, New York 11530.
Members of the firm of Hollenberg Levin Solomon Ross & Belsky, LLP hold a
direct or indirect interest in 16,667 West 10th Street Warrants.

EXPERTS

The Consolidated Financial Statements included in this Prospectus and
elsewhere in the Registration Statement have been audited by Cornick, Garber
& Sandler, LLP independent public accountants to the extent and for the
periods indicated in their report with respect thereto and were included
herein in reliance upon the authority of said firm as experts in giving said
report. Reference is made to said report which includes an explanatory
paragraph regarding the Company's litigation uncertainties.
<PAGE>
<PAGE>

ADDITIONAL INFORMATION

With respect to the securities offered hereby, the Company has filed
with the Securities and Exchange Commission (the "Commission") a post-effective
amendment to its Registration Statement to Form S-1 on Form SB-2
under the Securities Act. For purposes hereof, the term "Registration
Statement" means the original Registration Statement and any and all
amendments thereto. This Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits thereto, to which
reference hereby is made. Each statement made in this Prospectus concerning
a document filed as an exhibit to the Registration Statement is qualified in
its entirety by reference to such exhibit for a complete statement of its
provisions.

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance with those requirements files reports and other information with
the Commission under the File No. 0-8027. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its Regional Offices located at 7 World Trade
Center, New York, New York 10007 and Room 1204, Everett McKinley Dirksen
Building, 219 South Dearborn Street, Chicago, Illinois 60604. Copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.

The Company distributes annual reports containing audited financial
statements to the Company's shareholders.
<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

INDEX
-----
Page
----

Independent Auditors' Report F-2

Consolidated Financial Statements:

Balance Sheet as at June 30, 1995 F-3

Statements of Operations for the Years
Ended June 30, 1995 and June 30, 1994 F-4

Statements of Changes in Shareholders' Equity
for the Years Ended June 30, 1995 and June 30,
1994 F-5

Statements of Cash Flows for the Years Ended
June 30, 1995 and June 30, 1994 F-6-7

Notes to Financial Statements F-8-22

<PAGE>
<PAGE>
Independent Auditors' Report

Board of Directors and Shareholders
Eastco Industrial Safety Corp.
Huntington Station, New York

We have audited the accompanying consolidated balance sheet of EASTCO
INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES as at June 30, 1995 and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for each of the two years in the period ended June 30, 1995. 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly,
in all material respects, the consolidated financial position of Eastco
Industrial Safety Corp. and Subsidiaries as at June 30, 1995 and the results
of their operations and their cash flows for each of the two years in the
period ended June 30, 1995, in conformity with generally accepted accounting
principles.

As discussed in Note 11 to the consolidated financial statements, the
Company is a defendant in various lawsuits, together with a multitude of other
defendants, in actions alleging exposure by plaintiffs to asbestos and products
containing asbestos sold by the Company over unspecified periods of time. The
Company is also a defendant in a non-asbestos related product liability
lawsuit. While the Company has entered into an agreement with its primary
insurance companies which limits its liability with respect to certain asbestos
litigation, the ultimate outcome or range of liability, if any, resulting from
the various lawsuits cannot presently be determined. Accordingly, no provision
for any liability that may result has been made in the accompanying
consolidated financial statements.

/s/ Cornick, Garber & Sandler, LLP
CERTIFIED PUBLIC ACCOUNTANTS
Uniondale, New York
September 8, 1995

F-2
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

AS AT JUNE 30, 1995

ASSETS

Current assets:
Cash and cash equivalents (Note 1) $ 521,210

Accounts receivable $4,202,173
Less allowance for doubtful accounts
(Note 5) 304,000 3,898,173

Inventories (Notes 1, 2 and 5) 4,363,898
Other 481,868

Total current assets 9,265,149

Property, plant and equipment, net (Notes 1, 3,
5 and 6) 1,319,111
Other assets 131,788

T O T A L $10,716,048
LIABILITIES

Current liabilities:
Loans payable (Note 5) $ 4,928,908
Current maturities of long-term debt (Note 6) 48,762
Accounts payable 2,891,043
Accrued expenses 331,907

Total current liabilities 8,200,620

Long-term debt, less current maturities (Note 6) 489,782

Total liabilities 8,690,402

Commitments and contingencies (Notes 9, 10 and 11)

SHAREHOLDERS' EQUITY
(Notes 5, 6 and 7)

Common stock, $.12 par value; authorized
20,000,000 shares; outstanding 3,477,383
shares $ 417,286
Additional paid-in capital 5,848,952
(Deficit) (statement attached) (4,240,592) 2,025,646

T O T A L $10,716,048
The notes to consolidated financial statements are made a part hereof.

F-3
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended June 30,
1995 1994

Net sales $24,024,897 $20,745,809

Costs and expenses:
Cost of sales (Note 1) 19,254,571 17,372,063
Selling, general and
administrative (Note 1) 4,148,517 4,709,037
Interest (including approximately
$812,000 of debt finance costs
and common stock issued to note
holders in 1994) (Notes 5 and 6) 583,665 1,391,777
Other income (net) (39,793) (15,690)

Total costs and expenses 23,946,960 23,457,187

NET INCOME (LOSS) $ 77,937 $(2,711,378)

Net income (loss) per common share
(Note 1) $.02 $(2.08)

Weighted average number of common
shares outstanding (Note 1) 3,477,383 1,305,846

The notes to consolidated financial statements are made a part hereof.

F-4
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(NOTES 5, 6 AND 7)

<TABLE>
<CAPTION>
Additional
Common Stock Treasury Stock Paid-in
------------------- --------------- Capital (Deficit) Total
-------- -------- ------- ------ --------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE - JULY 1, 1993 800,310$ 96,037 (167) $ (5,500)$2,150,691 $(1,607,151) $ 634,077

Net proceeds of public offering 2,300,000 276,000 3,169,520 3,445,520
Shares issued to Scorpio Partners
to reacquire warrant 87,500 10,500 (10,500)
Shares issued in connection with
bridge loan financing 287,500 34,500 540,500 575,000
Sale of warrant to underwriter 10 10
Retirement of treasury stock (167) (20) 167 5,500 (5,480)
Shares issued for services 2,240 269 4,211 4,480
Net (loss) for the year ended
June 30, 1994 (2,711,378)(2,711,378)

BALANCE - JUNE 30, 1994 3,477,383 417,286 -- -- 5,848,952 (4,318,529) 1,947,709

Net income for the year ended
June 30, 1995 77,937 77,937

BALANCE - JUNE 30, 1995 3,477,383$417,286 -- $ -- $5,848,952 $(4,240,592) $ 2,025,646

</TABLE>

The notes to consolidated financial statements are made a part hereof.

F-5

<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended June 30,
INCREASE (DECREASE) IN CASH AND 1995 1994
CASH EQUIVALENTS

Cash flows from operating activities:
Net income (loss) $ 77,937 $(2,711,378)

Adjustments to reconcile results of
operations to net cash effect of
operating activities:
Depreciation and amortization 164,533 172,870
(Reduction of) provision for losses on
accounts receivable (38,655) 138,843
Shares issued in connection with
bridge loan financing 575,000
Shares issued for services 4,480
Net changes in assets and liabilities:
Accounts receivable (430,003) 1,120,727
Inventories (1,197,860) 371,746
Other current assets (37,608) (25,797)
Other assets 20,247 59,107
Accounts payable 401,146 (1,262,624)
Accrued expenses (102,136) 134,982
Deferred compensation (65,000)

Total adjustments (1,220,336) 1,224,334

Net cash used for operating
activities (1,142,399) (1,487,044)

Cash flows from investing activities:
Acquisition of property, plant and
equipment (191,242) (24,658)

(Continued)

F-6

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
-2-

Year Ended June 30,
1995 1994

Cash flows from financing activities:
Repayments of long-term debt $ (42,426) $ (361,913)
Borrowings under line of credit
agreements 25,789,531 22,159,610
Repayments under line of credit
agreements (24,044,483) (23,363,860)
Net proceeds from public offering
of common stock and warrants 3,445,520
Proceeds from sale of warrants 10
(Decrease) increase in bank
overdrafts (365,277) 149,841

Net cash provided by
financing activities 1,337,345 2,029,208

NET INCREASE IN CASH AND CASH EQUIVALENTS 3,704 517,506

Cash and cash equivalents - July 1 517,506 --

CASH AND CASH EQUIVALENTS - JUNE 30 $ 521,210 $ 517,506

Supplemental disclosure of cash paid
for interest $ 583,665 $ 548,702

Supplemental disclosure of noncash
financing activities:

Repurchase of warrant for
issuance of stock $ -- $ 175,000

The notes to consolidated financial statements are made a part hereof.

F-7

<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 1 - Summary of Significant Accounting Policies:

Principles of Consolidation:

The consolidated financial statements include the accounts of
Eastco Industrial Safety Corp. and its subsidiaries, all of which
are wholly-owned. All significant intercompany balances and
transactions have been eliminated in consolidation.

Cash:

Cash includes certificates of deposit of approximately $500,000 in
1995 and $475,000 in 1994 which are considered cash equivalents on
the statement of cash flows. At June 30, 1995, a $300,000
certificate has been pledged as collateral for a bank loan to the
extent of such loan (see Note 5).

Inventories:

Inventories are stated at the lower of cost (determined on a
first-in, first-out basis) or market, which represents estimated
net realizable value.

Depreciation and Amortization:

Property, plant and equipment are depreciated on a straight-line
basis over the estimated useful lives of the related assets.
Leasehold improvements are amortized on a straight-line basis over
the shorter of their estimated useful lives or the remaining term
of the lease.

Income Taxes:

In 1987, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 96. Financial Accounting
Standards Statement No. 109 (FASB 109), which superseded FASB 96,
was adopted for the fiscal year ended June 30, 1994. However,
because of the similarity of these two statements as they affect
the Company, the adoption of FASB 109 did not have a material
effect on the consolidated financial statements.

(Continued)

F-8<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 1 - Summary of Significant Accounting Policies (Continued):

Per Share Amounts:

Earnings and loss per share amounts have been computed utilizing
the weighted average number of common shares outstanding each
year. Such computations do not include common stock equivalents
(Notes 6 and 7) because their inclusion would not be material for
1995 and they were anti-dilutive for 1994.

NOTE 2 - Inventories:

Inventories consist of the following at June 30, 1995:

Raw materials $1,688,881
Work-in-process 440,164
Finished goods 2,234,853

Total $4,363,898

NOTE 3 - Property, Plant and Equipment:

Property, plant and equipment is comprised of the following at June 30,
1995:
Estimated
Useful Life
(Years)

Cost:
Land $ 382,000
Building and leasehold
improvements 827,451 5 - 40
Machinery and equipment 1,160,416 3 - 10
Furniture and fixtures 192,948 7 - 10

Total 2,562,815

Less accumulated depreciation
and amortization 1,243,704

Balance $1,319,111

(Continued)
F-9
<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 4 - Income Taxes:

Effective July 1, 1993, Statement of Financial Accounting Standards No.
109 (SFAS 109) became effective for the Company. The adoption of SFAS 109
had no effect on the financial statements as at June 30, 1994 and for the
year then ended. While SFAS 109 requires the recognition of a deferred
tax asset for the benefit of net operating loss carryforwards, it also
requires the recognition of a valuation allowance when it is more likely
than not that such benefit will not be realized. As a result of the
Company's past history of losses, it has recorded a valuation allowance
of $2,237,000, which equals the net deferred tax asset account at June 30,
1995.

Deferred income taxes at June 30, 1995 relate to the following temporary
differences and carryforwards:

Deferred tax assets:
Net operating loss carryforwards $2,056,000
Allowance for doubtful accounts and credits 124,000
Tax basis adjustments to inventory 60,000

Total 2,240,000

Less deferred tax liability:
Accelerated depreciation of property
and equipment (3,000)

Balance 2,237,000

Less valuation allowance (2,237,000)

Net deferred income taxes after
valuation allowance $ --

(Continued)
F-10
<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 4 - Income Taxes (Continued):

Two wholly-owned Puerto Rico based subsidiaries have been granted
exemptions from paying Puerto Rico income taxes under provisions of the
Puerto Rico Industrial Tax Exemption Act of 1963, provided such sub-
sidiaries continue to meet the terms and conditions of their grants.
One subsidiary's exemption expires June 30, 1999. The subsidiary has
received a 90% exemption from Puerto Rico income taxes and a 75%
exemption from Puerto Rico municipal and property taxes. The second
subsidiary has received a 90% exemption from Puerto Rico income and
property taxes and a 60% exemption from Puerto Rico municipal income
taxes to June 2006. These subsidiaries have elected, pursuant to Section
936 of the Internal Revenue Code, to receive credits equivalent to the
amount of Federal income taxes which would otherwise be due on their
income. The Omnibus Budget Reconciliation Act of 1993 imposes new
limitations on computing the Possession Tax Credit under Section 936 for
tax years beginning after 1993. In addition, the Act makes the 100%
dividends received deduction subject to the Alternative Minimum Tax
calculation.

Dividends, if paid by the Puerto Rico based subsidiaries, are subject to
a withholding tax of 10%; however, no taxes have been provided on their
aggregate undistributed earnings of approximately $2,458,000 at June 30,
1995 because it is management's intention to reinvest such earnings
indefinitely.

(Continued)

F-11
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 4 - Income Taxes (Continued):

A reconciliation between the expected tax expense at the statutory
federal income tax rate and the Company's actual income tax expense
is as follows:

June 30,
1995 1994

Income tax expense (benefit) at the
statutory rate $ 26,000 $(922,000)
Effect of net operating loss of
Puerto Rican subsidiaries for
which there is no current tax
benefit 106,000
Effect of domestic net operating
loss for which there is no
current tax benefit 816,000

Benefit of utilization of net
operating loss carryforwards (26,000)

Actual income tax expense $ -- $ --

At June 30, 1995, the Company has net operating loss carryforwards of
approximately $5,410,000 for federal income tax purposes. Such
carryforwards expire in 2005 through 2009. As a result of the public
stock offering in April 1994 (Note 7), the amount of the loss
carryforwards which can be utilized to offset future taxable income will
be limited to approximately $380,000 a year, plus any loss carryforwards
incurred after April 19, 1994. However, to the extent such annual
limitation is not utilized in any year, it may be further carried
forward until the carryforward would have otherwise expired.
Accordingly, carryforwards available to be utilized for the year ending
June 30, 1996 approximate $1,584,000.

(Continued) F-12
<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 5 - Loans Payable:

The Company's line of credit agreement, which expires in October 1996,
with Congress Financial Corporation ("Congress") provides for borrowings
up to $5,750,000 with interest payable monthly at 2 1/2% above the prime
rate, plus an unused line fee of 1/4% a year. Borrowings are limited to
80% of eligible accounts receivable and 50% of eligible inventory up to
a maximum inventory of $2,875,000. The loan is subject to certain working
capital and net worth requirements and is collateralized by all assets of
the Company not previously pledged under other loan agreements. The loan
agreement prohibits the payment of dividends by the Company. In September
1993, Congress sold to three individuals, who are officers and directors
of the Company, a $250,000 junior participation in the loans made to the
Company. The Company had an informal agreement with Congress, whereby
Congress agreed to provide the Company an additional $500,000 in borrowing
availability which was repaid at $11,250 a week beginning November 1, 1993
until $250,000 of additional borrowings was repaid. Congress can, at its
option, repurchase the junior participation if the Company has at least
$250,000 in availability under the financing agreement; such participation
has not been repurchased at June 30, 1995. The participants' interest in
the obligations, collateral and collections is subordinated to Congress.

On June 28, 1995, the Company borrowed $100,000 from a bank under a 30 day
note, which is renewable at the bank's option. Interest is payable at 1%
above the prime rate.

In December 1993, the Company received a non-interest bearing loan of
$400,000 from an underwriter as an advance against a $750,000 private
placement bridge loan which was completed in January 1994. Additional
bridge loans of $375,000 and $25,000 were received in March and April
1994, respectively. The loans were repaid in April 1994 on the closing
of a public offering (Note 7). The interest on these loans was at 5% a
year, plus the issuance of $575,000 of the Company's common stock upon the
closing of the public offering. The costs incurred in connection with the
issuance of the notes of approximately $160,000, together with the
$575,000 value of the 287,500 shares of the Company's common stock issued
to the note holders was charged to operations and included with interest
expense during the year ended June 30, 1994.

(Continued) F-13
<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 6 - Long-Term Debt:

Long-term debt at June 30, 1995 consists of a mortgage payable, collater-
alized by land, building, accounts receivable and personal property, with
interest at 14.0%. In June 1992, a group of investors, including the
spouses of certain officers and directors of the Company, acquired the
mortgage on the Company's building with a balance of approximately
$962,000 and $500,000 of subordinated debt from a bank for $650,000. The
group entered into a modification of indebtedness agreement which reduced
the mortgage to $650,000 and forgave the balance, which, after the write
off of related deferred financing costs, resulted in a gain of $722,000
in fiscal 1992. In connection with this transaction, the Company also
issued five-year warrants to acquire 108,333 shares of common stock at
$3.00 a share. In January 1995, the Company reduced the exercise price
to $1.30 and extended the expiration date until April 1999. The mortgage
is payable in monthly installments of $10,092, including interest, with
the remaining balance of approximately $434,000 due in July 1997.
Interest on the mortgage was $78,682 and $84,195 for the years ended June
30, 1995 and 1994, respectively, approximately 31% of which is applicable
to the spouses of the officers and directors of the Company.

In June 1993, the Company borrowed $325,000 from Scorpio Partners L.P.
("Scorpio") in the form of a convertible subordinated note, payable in
June 1997. In connection with the note, the Company also sold to Scorpio
for $25,000 and $15,000, respectively, warrants to purchase 400,000 shares
of the Company's common stock at $2.00 a share and 250,000 shares of
common stock at $3.00 a share.

In January 1994, the Scorpio loan was renegotiated (whereby the first
warrant was purchased by a corporate officer/director and extended to
March 31, 1997 and the second warrant was purchased by the Company and
canceled) in consideration for the issuance of common stock having a total
value of $175,000 on the effective date of a public offering. In April
1994, the Scorpio loan was repaid upon the closing of the public offering.
The $10,500 par value of the shares issued to repurchase the warrants was
charged against additional paid-in capital in the year ended June 30,
1994. The finance costs of approximately $77,000 incurred in connection
with these loans were charged to operations during the year ended June 30,
1994 and are included with interest expense on the statement of operations.
Two partners of Scorpio were officer/directors of the Company from
June 29, 1993 until January 1994 and June 1994. Interest paid on the note
during the year ended June 30, 1994 was $20,346.

(Continued) F-14
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 7 - Shareholders' Equity:

Common Stock:

In April 1991, the Company sold, pursuant to a rights offering, 480,065
shares of common stock. In this connection, the underwriter was sold a
warrant to purchase 40,782 shares of common stock at $5.33 per share,
which is exercisable until February 28, 1996. The Company also had
borrowed $200,000 with interest at 17% per annum during February 1991 from
five unrelated parties. These loans were repaid out of the proceeds of
the rights offering, including interest. In connection with these loans,
the Company issued warrants to purchase 8,333 shares of common stock,
exercisable at $3.00 per share until May 13, 1996. In January 1995, the
Company reduced the exercise price of the above warrants to $1.30 and
extended their expiration dates until April 1999.

On April 19, 1994, the Company sold in a public offering 2,000,000 units
at $2.00 per unit. Each unit consists of one share of the Company's
common stock and one Class A warrant. Each warrant entitled the holder
to purchase one share of common stock at an exercise price of $2.40 a
share, from April 12, 1995 through April 12, 1999. In January 1995, the
Company reduced the exercise price to $1.30 a share. These warrants are
redeemable by the Company commencing April 12, 1995 at $.10 a warrant,
provided that the high bid price of its stock is at least $1.95 for the
required number of days prior to the Notice of Redemption. The Company
also granted to the underwriter an option to purchase, at the same price,
300,000 units to cover over-allotments. This option was exercised in May
1994. The net proceeds to the Company of these sales were $3,445,520.
Out of these proceeds, the bridge loans (Note 5) of $1,150,000 plus
interest and the Scorpio loan (Note 6) of $325,000 plus interest were
repaid. In addition, the Company sold to the underwriter for $10 an
option, exercisable from April 12, 1995 to April 12, 1999, to purchase
230,000 additional units at $2.90 a unit and entered into a two year
consulting agreement with the underwriter at a total cost of $72,000.
Subsequent to the public offering, two officers of the underwriter became
directors of the Company until their resignations on July 10, 1995 (see
Note 12).

Incentive Stock Option Plans:

Under the Company's 1983 Incentive Stock Option Plan, options could be
granted to June 23, 1993 for a maximum of 56,250 shares of the Company's
common stock. At June 30, 1995, options to purchase 8,654 shares at
$2.67 to $3.00 a share are outstanding; no further options may be granted
under this plan.

(Continued) F-15
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 7 - Shareholders' Equity (Continued):

Incentive Stock Option Plans (Continued):

The Company's 1992 Incentive Stock Option Plan provides for the granting
of options for 200,000 shares of the Company's common stock to December
20, 2002.

The Company's 1994 Incentive Stock Option Plan provides for the granting
of options for 100,000 shares of the Company's common stock to January
2004.

Options granted under the incentive stock option plans must be exercised
within such period as stated in the plans and, in any event, must be
exercised no later than ten years after the date they are granted. The
plans provide that the exercise price of the options may not be less than
100% of the fair market value of common stock at the date of grant or 110%
in the case of an incentive stock option granted to any employee owning
more than 10% of the voting power of all classes of stock of the Company.

Transactions under the above plans are summarized as follows:

Shares Option Price Per Share

Outstanding - July 1, 1993 265,029 $2.64 to $39.60

Expired (8,250)
Canceled (245,000)* $2.75 to $ 5.13

Outstanding - June 30, 1994 11,779 $2.64 to $ 3.00

Granted 85,000 $1.06
Expired (125)

Outstanding - June 30, 1995 96,654 $1.06 to $3.00

*In connection with the public offering in 1994, holders of incentive
and non-qualified stock options for 254,208 shares at prices of $2.75
to $44.04 a share agreed to the cancellation of their options.

(Continued)
F-16
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 7 - Shareholders' Equity (Continued):

1995 Stock Options:

On January 20, 1995, the Board of Directors granted to the Company's
president and two vice-presidents ten-year non-qualified options to
purchase 400,000 shares each at $1.06 per share. The options are exercis-
able after five years but may become exercisable sooner upon the Company
achieving pretax earnings targets. Based on the earnings for the year
ended June 30, 1995, options for 600,000 shares are now exercisable;
options for the remaining shares will become exercisable if the Company's
pretax earnings for the year ending June 30, 1996 exceeds the $250,000
target.

Other non-qualified options outstanding at June 30, 1995, under prior
years' grants aggregate 1,083 shares at prices of $3.00 to $44.04 a share.
The following summarizes shares reserved at June 30, 1995 under options
and warrants outstanding:

Price Per
Number Share or Unit
Stock options:
Incentive stock option plans 96,654 $1.06 - $ 3.00
Non-qualified options 1,201,083 $1.06 - $ 3.00
Warrants:
Class A 2,300,000 $1.30
Other 557,448 $1.30
Underwriter's warrants
(comprised of one share
of common stock and one Class
A warrant) (subsequently can-
celled (see Note 12)) 230,000 $2.90

(Continued)
F-17
<PAGE>
<PAGE>

EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 8 - Commitments and Contingencies:

Rent:

The Company is obligated through August 2003 under several noncancellable
long-term operating leases covering office, factory and warehouse facili-
ties. Minimum annual rentals under these leases are:

Year ending June 30:
1996 $ 109,000
1997 116,000
1998 127,000
1999 137,000
2000 157,000
Thereafter 474,000

Total $1,120,000

Rent expense, including month-to-month rentals, was $219,000 and $221,000
in the fiscal years ended June 30, 1995 and 1994, respectively.

Employment Agreements:

The Company had employment agreements, which commenced as of the effective
date of the April 1994 public offering, with three of its officers. These
agreements provided for combined annual salaries of $247,000. On July 1,
1995, these officers entered into new agreements which provide for the
following:

Officer Period Annual Salary

President (a) 5 years $125,000
Senior Vice-President (b) 5 years $105,000
Vice-President of Finance
and Treasurer (c) 5 years $ 55,000

(Continued)
F-18
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 8 - Commitments and Contingencies (Continued):

Employment Agreements (Continued):

(a) This officer is entitled to a bonus of 3 1/3% of the Company's
income before taxes and interest.

(b) This officer is entitled to a bonus of 3 1/3% of the Company's
income before taxes and interest and a bonus of 3/4 of 1% of net
sales in excess of $20,500,000.

The above officers are also entitled to annual increases of not less than
10% of the prior year's compensation. In addition, should an unrelated
party obtain more than 20% of the Company's then outstanding stock, other
than by transactions initiated by the Company, the following will occur:

(a) Each will be paid a bonus equal to their minimum base salary for
the next three years.

(b) Each will be repaid their junior participation in loans made to
the Company (see Note 5).

NOTE 9 - Profit Sharing Plan:

The Company's qualified profit sharing plan covering all eligible full-
time employees provides for discretionary (i.e., no minimum contributions
are required) contributions as approved by the Company's Board of
Directors. The profit sharing plan includes a 401(k) plan. There were
no contributions made for the fiscal years ended June 30, 1995 and 1994.

(Continued)
F-19
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 10 - Industry Segmental Information:

The Company operates in two industry segments. The first is the
manufacturing and sale of disposable clothing, industrial protective
clothing and protective products to distributors. The second is the
distribution and sale of industrial protective clothing and protective
products directly to "end users". These segments are summarized as
follows:

1995 Distribution Manufacturing Total

Net sales $ 9,233,456 $14,791,441 $24,024,897

Operating profit $ 156,199 $ 1,666,331 $ 1,822,530

General corporate expenses (1,160,928)
Interest expense (583,665)

Income before provision for
income taxes $ 77,937

Identifiable assets $ 4,291,806 $ 6,424,242 $10,716,048
Capital expenditures $ 27,882 $ 163,360 $ 191,242
Depreciation and amortiza-
tion expense $ 37,462 $ 127,071 $ 164,533

1994

Net sales $ 8,653,738 $12,092,071 $20,745,809

Operating profit $ 80,839 $ 235,564 $ 316,403

General corporate expenses (1,636,004)
Interest expense (1,391,777)

Loss before provision for
income taxes $(2,711,378)

Identifiable assets $ 4,035,140 $ 4,966,616 $ 9,001,756
Capital expenditures $ 13,850 $ 10,808 $ 24,658
Depreciation and amortiza-
tion expense $ 35,620 $ 137,250 $ 172,870
(Continued)
F-20
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994
NOTE 11 - Litigation:

At June 30, 1995, the Company is a defendant in approximately 250 law-
suits, together with a multitude of other defendants, in actions alleging
exposure by approximately 480 first party plaintiffs to asbestos and
products containing asbestos sold by the Company over unspecified periods
of time.

To June 30, 1995 and since 1981, the Company estimates approximately 830
actions on behalf of approximately 6,400 first party plaintiffs have been
instituted against it concerning asbestos related claims and that claims
of approximately 5,920 plaintiffs have been terminated. The foregoing
numbers assume the consummation of pending settlements. The Company
estimates that with the exception of defense costs, a total of approximately
$1,300,000 has been agreed to in settlements to date with regard
to the terminated actions of which all but $25,000 has been paid by
the Company's insurance carriers. The Company has been notified that for
actions terminated subsequent to June 30, 1995, its share of the settlements
made will be approximately $15,000. To June 30, 1995, the Company
has paid less than $40,000 for legal and defense costs to counsel
appointed by the insurance companies to defend it. The Company entered
into an agreement with its primary insurance companies, wherein its
liability is limited to 12% of the cost of the defense liability and 17%
of the settlement claim of certain litigation. The agreement, which is
subject to policy limitations on each insurance policy, may be terminated
at any time upon 90 days notice by any of the parties provided that
termination may not be effective as to any asbestos action that has
already been placed on the trial calendar, unless it has a scheduled
trial date more than 12 months from the date the notice is given. In May
1991, the Company reached an agreement with Mount Vernon Fire Insurance
Company, one of its primary insurance carriers, with respect to its pend-
ing and future asbestos litigation. Mount Vernon agreed to contribute
6.25% to the Company's defense costs and 6.25% to its indemnity costs for
so long a period of time as $100,000 in aggregate has not been paid for
indemnity costs. This agreement applied only during the period Mount
Vernon provided insurance coverage, which is between April 1, 1968 to
April 1, 1969. However, because past results of settlements and defense
costs are not necessarily indicative of future settlements and defense
costs and because, as of this date, management is still unable to fully
ascertain the extent of insurance coverage applicable to asbestos claims
against the Company or the extent to which insurance carriers will
provide coverage, neither management nor counsel is able to predict the
outcome of these matters or the range of any potential liability that
might result. In addition, based on past history, management believes
it is likely that there will be additional asbestos action instituted
against the Company.

(Continued) F-21
<PAGE>
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1995 AND 1994

NOTE 11 - Litigation (Continued):

The Company is party to other product liability litigation arising in the
ordinary course of business. After consultation with counsel, the
Company considers that its ultimate liability, if any, after available
insurance coverage, in the majority of these matters, would not have a
material adverse effect upon the Company's financial position. However,
there can be no assurances that the Company's insurance coverage will
adequately cover these cases or whether the Company's insurance will
provide coverage for punitive damages should they be awarded.

NOTE 12 - Subsequent Events:

On July 10, 1995, the Company issued 100,000 shares of common stock to
the underwriter of its 1994 public stock offering in exchange for the
cancellation of all of its rights under the Underwriting Agreement. The
Company has agreed to register these shares with the Securities and
Exchange Commission by October 31, 1995 or to issue an additional 50,000
shares to the underwriter and register all of the shares thereafter.

On July 26, 1995, the Company issued to its investment advisor, which a
new director of the Company is a consultant to, a five year warrant to
purchase 125,000 shares of the Company for $1.25 a share.

F-22

<PAGE>

TABLE OF CONTENTS

Page
----
Prospectus Summary 2
Summary Financial 5
Information
Risk Factors 6
Use of Proceeds 16
Dilution 17
Capitalization 18
Market Information 19
Dividend Policy 19
Management's Discussion 20
and Analysis of Results
of Operations and
Financial Condition
Business 23
Management 30 2,770,833
Principal Shareholders 37
Description of Securities 39 Shares of
Selling Stockholders 41 Common Stock
Plan of Distribution 42
Shares Eligible for
Future Sale 42 EASTCO INDUSTRIAL
Certain Transactions 43 SAFETY CORP.
Legal Matters 44
Experts 44
Additional Information 45
Consolidated Financial
Statements F-1

No dealer, salesman or any
other person has been
authorized to give any ----------------
information or to make any PROSPECTUS
representations other than ----------------
those contained in this
Prospectus, and, if given or
made, such information or
representations must not be
relied on as having been
authorized by the Company. This
Prospectus does not constitute
an offer to sell or a
solicitation of an offer to
buy, by any person in any
jurisdiction in which it is
unlawful for such person to
make such offer or
solicitation.

<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers

Article Eleven of the Company's Certificate of Incorporation, as
amended, contains the following provision with respect to indemnification of
Directors and Officers:

11. The Corporation shall, to the fullest extent
permitted by Section 722 of the Business
Corporation Law of the State of New York, as the
same may be amended and supplemented, indemnify any
and all persons whom it shall have power to
indemnify under said section from and against any
and all of the expenses, liabilities or other
matters referred to in or covered by said section,
and the indemnification provided for herein shall
not be deemed exclusive of any other rights to
which those indemnified may be entitled under any
By-Law, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to
action in his official capacity and as to action in
another capacity while holding such office, and
shall continue as to a person who has ceased to be
a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and
administrators of such a person.

Section 722 of the Business Corporation Law of the State of New York
contains provisions entitling directors and officers of the Company to
indemnification from judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees, as the result of an action or
proceeding in which they may be involved by reason of being or having been a
director or officer of the Company provided said officers or directors acted
in good faith, the acts were not the result of deliberate dishonesty, and
that the indemnitee does not personally gain or profit where not legally
entitled to do so.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been informed that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act 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 of 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 Securities Act and is therefore
unenforceable and will be governed by the final adjudication of such issue.

<PAGE>

Item 25. Other Expenses of Issuance and Distribution

Estimates of fees and expenses incurred or to be incurred in connection
with the issuance and distribution of securities being registered:

Printing and Mailing Costs and Fees $ 5,000
Legal Fees and Costs 35,000
Accounting Fees and Costs 20,000
Miscellaneous Expenses 15,000
________
TOTAL $75,000

Item 26. Recent Sales of Unregistered Securities

Except as set forth below, there were no securities sold by the
Registrant within the past three years without registering the securities
under the Securities Act:

On July 10, 1995, the Company terminated its relationship with the Unit
Underwriter, the Company's underwriter in its Unit Offering. Pursuant to an
agreement dated July 10, 1995, the Company canceled all of the Unit
Underwriter's rights under the Underwriting Agreement in connection with the
Unit Offering, including, but not limited to, the right of first refusal to
act on behalf of the Company in future transactions, the cancellation of all
Underwriter's Warrants held by it or its affiliates, their right to
representation on the Company's board of directors and the termination of any
obligation by holders of securities subject to a "lock-up" to obtain the
permission of the Unit Underwriter prior to sale or other disposition of said
securities. At the same time, Leonard A. Neuhaus and Sheldon Lieberbaum, who
are affiliated with the Unit Underwriter, resigned as directors of the
Company. In exchange, the Company issued 100,000 shares of common stock to
the Unit Underwriter and has agreed to register these shares with the
Securities & Exchange Commission by October 31, 1995 or to issue an
additional 50,000 shares and register all of the shares if such registration
statement is not filed by said date.

The sale set forth above is claimed to be exempt from registration with
the Commission pursuant to Section 4(2) of the Securities Act of 1933, as
transactions by an issuer not involving any public offering.

Item 27. Exhibits

The following Exhibits were previously filed or incorporated by
reference with respect to this Registration Statement as indicated in
Amendment No. 4 to the Registration Statement:

Exhibit Description of Exhibit
1a Form of Underwriting Agreement
3a Certificate of Incorporation
3b By-Laws
4a Form of Common Stock Certificate
4b Form of Class A Warrant Certificate
4c Form of Warrant Agency Agreement between the Registrant and
American Stock Transfer and Trust Co. (incorrectly referred to
as Continental Stock Transfer and Trust Company)
4e 1992 Incentive Stock Option Plan as amended to date(1)
5a Opinion of Schneck Weltman Hashmall & Mischel

<PAGE>

10e Profit Sharing Plan as amended to September 1988 with 401(k)
features(2)
10f Amendment to Profit Sharing Plan effective January 1, 1989(3)
10g Amendment to Profit Sharing Plan effective September 15,
1990(4)
10h Accounts Financing Agreement (Security Agreement), Covenants
Supplement to Accounts Financing Agreement (Security
Agreement), Inventory Loan Agreement and Inventory and
Equipment Security Agreement Supplement to Accounts Financing
Agreement (Security Agreement) executed as of October 1, 1991
with Congress Financial Corporation(5)
10i Modification of Indebtedness Agreement with 130 West 10th
Street Associates, L.P. dated June 30, 1992(6)
10l Amended Non-Redeemable Common Stock Purchase Warrant to
Purchase Warrant to Scorpio Partners, L.P. dated January 31,
1994
10o Exemption of Puerto Rico Safety Corporation with respect to
Puerto Rico taxes as amended to date(1)
10p Joint Participation Agreement between Congress and Alan E.
Densen dated September 20, 1993(1)
10q Joint Participation Agreement between Congress and Anthony P.
Towell dated September 20, 1993(1)
10r Joint Participation Agreement between Congress and Lawrence P.
Densen dated September 20, 1993(1)
10s Scorpio Partners, L.P.-Towell Warrant Sale Agreement, dated
January 31, 1994
10w 1994 Stock Option Plan
22 Subsidiaries of the Registrant
28c Defense and indemnity agreement dated March 26, 1990(4)
28d Insurance coverage for Puerto Rico Safety Equipment
Corporation for asbestos(4)
______________
(1) Filed with the Registrant's Annual Report on Form 10-K for the year
ended June 30, 1993, and incorporated herein by this reference.
(2) Filed with the Registrant's Annual Report on Form 10-K for the year
ended June 30, 1988, and incorporated herein by this reference.
(3) Filed with the Registrant's Annual Report on Form 10-K for the year
ended June 30, 1989, and incorporated herein by this reference.
(4) Filed with the Registrant's Annual Report on Form 10-K for the year
ended June 30, 1990, and incorporated herein by this reference.
(5) Filed with the Registrant's Annual Report on Form 10-K for the year
ended June 30, 1991, and incorporated herein by this reference.
(6) Filed with the Registrant's Annual Report on Form 10-K for the year
ended June 30, 1992, and incorporated herein by this reference.

The following Exhibits are incorporated by reference to the Company's
Form 10-KSB for the year ended June 30, 1995:

4.5 Form of Option Agreement granted as of January 20, 1995 with
Alan E. Densen, Anthony P. Towell and Lawrence Densen.
10.8 Employment Agreement with Alan Densen dated July 1, 1995
10.9 Employment Agreement with Lawrence Densen dated July 1, 1995
10.10 Employment Agreement with Anthony P. Towell dated July 1, 1995
10.11 Agreement dated July 10, 1995 between the Company and Lew
Lieberbaum & Co., Inc.
10.12 Agreement dated April 18, 1995 between the Company and Donald
& Co. Securities Inc.

<PAGE>

10.13 Amendment to Financing Agreement with Congress dated July 1,
1995.
11 Computation of Earnings Per Share
28.4 Asbestos litigation as of June 30, 1995.
28.5 Product liability primary insurance coverage for asbestos.
28.6 Product liability excess insurance coverage for asbestos.
28.7 Defense and indemnity agreement dated March 26, 1990.

The following Exhibits are annexed hereto:

24.1 Consent of Hollenberg Levin Solomon Ross & Belsky, LLP
24.2 Consent of Cornick, Garber & Sandler, LLP

Item 28. Undertakings.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales of
securities are being made, a post-effective amendment to this Registration
Statement to: (i) include any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) reflect in the Prospectus any facts or events which,
individually or together, represent a fundamental change in the information
in the registration statement; and (iii) include any additional or changed
material information on the plan of distribution.

(2) For the purpose of determining liability under the Securities
Act, treat each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time to be
the initial bona fide offering.

(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the Offering.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, or otherwise, the Company
has been informed that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities
being registered, the Company 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 Securities Act and is therefore
unenforceable and will be governed by the final adjudication of such issue.
<PAGE>
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
in Huntington Station, New York on October 26, 1995.

EASTCO INDUSTRIAL SAFETY CORP.

By: /S/ Alan E. Densen
-------------------
ALAN E. DENSEN, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ Alan E. Densen Date: October 26, 1995
- ----------------------------
ALAN E. DENSEN, President,
Chief Executive Officer, and
Director

/s/ Anthony P. Towell Date: October 26, 1995
- -----------------------------
ANTHONY P. TOWELL
Vice President of Finance, Secretary,
Treasurer, Chief Financial Officer and
Director

/s/ Lawrence Densen Date: October 26, 1995
- -----------------------------
LAWRENCE DENSEN
Senior Vice President and
Director

/s/ Herbert Schneiderman Date: October 26, 1995
- ------------------------------
HERBERT SCHNEIDERMAN
Director

/s/ Martin Fleisher Date: October 26, 1995
- ------------------------------
MARTIN FLEISHER
Director

/s/ James A. Favia Date: October 26, 1995
- ------------------------------
JAMES A. FAVIA
Director

<PAGE>

EXHIBIT INDEX

Exhibit No. Exhibit Description

24.1 Consent of Hollenberg Levin Solomon Ross & Belsky, LLP
24.2 Consent of Cornick, Garber & Sandler, LLP

EXHIBIT 24.1

CONSENT OF COUNSEL

We hereby consent to the use of our name wheresoever set forth in this
Registration Statement (SB-2).

/s/ Hollenberg Levin Solomon Ross & Belsky, LLP
-----------------------------------------
Hollenberg Levin Solomon Ross & Belsky, LLP

Garden City, New York
October 26, 1995

EXHIBIT 24.2

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in the Prospectus constituting part of the
Registration Statement on Form SB-2 of our report dated September 8, 1995,
relating to the consolidated financial statements of Eastco Industrial Safety
Corp. and Subsidiaries as at June 30, 1995 and for each of the two years in
the period ended June 30, 1995 and to the reference to our firm under the
heading "Experts" in such prospectus.

/s/ Cornick Garber & Sandler
---------------------------------
CERTIFIED PUBLIC ACCOUNTANTS

Uniondale, New York
October 26, 1995