For the quarterly period ended February 28, 1999

For the transition period from December 1, 1998 to February 28, 1999

Commission file number: 000-13041

TTI INDUSTRIES, INCORPORATED
(Exact name of small business issuer as specified in its charter)

(Address of principal executive offices)

                                          (214) 520-1702                                          

(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Sections 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [  ]   No [X]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 4,073,401 as of September 30, 1999

Transitional Small Business Disclosure Format (Check One)  Yes  __;    No  X 

TTI INDUSTRIES, INCORPORATED
AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
February 28, 1999 and February 28, 1998

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TTI INDUSTRIES, INCORPORATED
AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)

Three Months and Six Months Ended

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TTI INDUSTRIES, INCORPORATED

AND SUBSIDIARIES

Consolidated Statements of Cash Flow (Unaudited)

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TTI INDUSTRIES, INCORPORATED
AND SUBSIDIARIES

Consolidated Statements of Stockholders'

Equity (Capital Deficit)
Six Months Ended February 28, 1999 (Unaudited)

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TTI INDUSTRIES, INCORPORATED
AND SUBSIDIARIES
Notes to Financial Statements
February 28, 1999

 NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

A.     Unaudited Interim Financial Information

The financial statements as of February 28, 1999 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). These statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the results for the periods presented. The balance sheet at August 31, 1998 has been derived from the audited financial statements at that da

B.     Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

C.     Income Taxes

The Company did not provide any current or deferred U.S. federal, state or foreign income tax provision or benefit for any of the periods presented because it has experienced operating losses for several years. Utilization of the Company's net operating loss carryforwards, which begin to expire in 2006, may be subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended. The Company has provided a full valuation allowance since it is more likely than n

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D.     Cash and Cash Equivalents

The Company considers cash on hand, cash in banks, certificates of deposit, time deposits and short term securities with maturities of three months or less when purchased as cash and cash equivalents.

E.     New Accounting Standards

Effective September 1, 1996 the Company adopted SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 establishes a new, fair value-based method of measuring stock based compensation, but does not require an entity to adopt the new method for preparing its basic financial statements. For entities not adopting the new method for preparing basic statements, SFAS No. 123 requires disclosures in the footnotes of pro forma net earnings per share information as if the fair value-based method ha

In 1998, the Financial Accounting Standards Board issued SFAS No. 128, "Earnings per Share." This Statement establishes standards for computing and presenting earnings per share and applies to entities with publicly held common stock or potential common stock. This Statement simplified the previous standards for computing earnings per share, and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requi

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS 131 establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those business enterprises report selected financial information about operating segments in interim reports to shareholders. It also establishes standards for related disclosur

NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION

During the six months ended February 28, 1999 no cash was used to pay interest and $862 of cash was used to pay accrued Texas franchise taxes.

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The Company has an agreement with AMJ Resources Corporation whereby the Company was to advance $250,000 during the period November 1998 through April 1999 to partially fund the Terminator Turtle product. The total advanced through February 28, 1999 was $126,000. The advances are non interest bearing. By agreement with AMJ these funds are to be credited against the total due AMJ for the assignment of AMJ's interest in the Terminator Turtle products. This assignment was completed in October 1999.

On August 1, 1998 the Company offered for sale to qualified investors 45,000 units, consisting of one share of 12.5% Convertible Preferred Stock (Par Value $1 per share) at $100 per share and 10 shares of Common Stock (Par Value $0.01 per share) at $0.10 per share. Each Preferred Share can be converted upon certain circumstances described in the offering circular into One Hundred (100) common shares. At November 30, 1998 1475 (units) had been issued. his offering was cancelled by the February 1, 1999

On February 1, 1999 the Company offered for sale to qualified investors 25,000 shares of 12.5% Convertible Preferred Stock (Par Value $1 per share) at $100 per share for a total offering of $2,500,000. Each Preferred Share can be converted upon certain circumstances into one hundred (100) common shares.

As part of the Stock Purchase Agreement of January 1998, the Company issued a 1.5 million share Common Stock Purchase Warrant to AMJ Resources Corporation for $20,000. The warrants are initially exercisable at $0.04445 per share and expire January 5, 2000. The transaction resulted in a $20,000 credit to additional paid-in capital at August 31, 1998.

Effective June 15, 1998 the Company reached agreement with Baron Chase Securities to cancel the consulting agreement of July 1, 1996 for 20,000 shares of common stock. No services had been billed to the Company as of June 15, 1998 and was issued at par value ($.01).

The Company is generally self-insured for losses and liabilities related primarily to workers' compensation, health and welfare claims, physical damage to property, business interruption resulting from certain events, and comprehensive general, product and vehicle liability.

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 Effective January 19, 1999 the Company formed Terminator Technologies, Inc. and Term Tex Corp. The Company intends to utilize Terminator Technologies, Inc. to act as the manufacturing and marketing entity for the Company's products and to utilize Term Tex as the research and development entity for the Company's products.

Since joining the Company in May 1998, the new Chief Executive Officer, along with the rest of the Company's management team has been developing a broad operational financial restructuring plan. That plan was presented to the Company's Board of directors in January 1999. TTI Industries, Inc. had virtually no business operations during the six months ended February 28, 1999. The Company plans to operate as a holding company, with its primary operations conducted through two wholly owne

Going forward, significant amounts of additional cash will be needed to pay the costs to implement the proposed business plan and to fund losses until the Company has achieved profitability. Based on management's proposed plan, the Company estimates that at least $1.5 million will be required to fund the company's restructuring costs and operations through the end of 1999 and that additional amounts could be required thereafter.

While there is no assurance that funding will be available to execute the plan, the Company is continuing to seek financing exploring a number of alternatives in this regard. The Company believes that this additional financing, along with its anticipated credit facilities, will be sufficient to support the Company's liquidity requirements through the end of 1999 depending on operating results.

In the absence of long-term financial support from investors, there can be no assurance that additional financing can be obtained from conventional sources. Management is exploring alternatives that include seeking strategic investors, or pursuing other transactions that could result in diluting existing shareholders. There can be no assurance that management's efforts in this regard will be successful.

The Company's results of operations for the quarter ended February 28, 1999 were significantly affected by the Company's discontinuation of the business of construction and repair of industrial cooling towers ("Past Business"), the consummation of an agreement among the Company, certain Company shareholders and Terminator Technologies, Inc., a Texas corporation

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("Terminator Texas"), and the sale of substantially all of its assets to Mr. George Davis in exchange for Mr. Davis' transfer to the Company of 574,184 shares of preferred ($1.00 par value) stock (the "Terminator Texas Transaction"). Effective May 6, 1998, the Terminator Texas Transaction was closed and subsequent to that date and through the close of the quarterly period ended February 28, 1999 the Company did not engage in any material revenue or income-producing activities.

As a result of the Terminator Texas Transaction, new management was appointed, the Company discontinued existing operations, changed its name to TTI Industries, Incorporated, and commenced plans for new operations. The Company intends to focus operations on the acquisition, production and marketing of (a) innovative pest control products for home and garden with an emphasis on products that (i) are safe for children, pets and wildlife, (ii) are environmentally friendly, (iii) are lo w

Liquidity and Capital Resources

At February 28, 1999, the Company's principal sources of liquidity consisted of $10,057 of cash compared to $7,388 of cash at February 28, 1998. Working capital at February 28, 1999 was $104,026 compared to ($31,923) at February 28, 1998.

The Company obtained $30,375 the private placement of securities during the quarter ended February 28, 1999 and used $10,502 in operating activities for the quarter ended February 28, 1999 and $32,241 for the six months ended February 28, 1999, as compared to $-0- and $-0- respectively for the quarter ended February 28, 1998 and the six month period ended February 28, 1998. During the quarter and six months ended February 28, 1999, $15,000 and $111,000 respectively was advanced to AMJ Re s

The Company made no capital acquisitions or improvement expenditures during the quarter and six months ended February 28, 1999 (similarly for the quarter and six months ended February 28, 1998), but anticipates a substantial increase in its capital needs consistent with the implementation of the Company's Business Plan (described below under "Results of Operations") when implemented. The Company believes that its current capital will not be sufficient to meet its anticipated cash needs fo

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financing necessary to finally implement and undertake its Business Plan. Moreover, the obtaining of any financing by the Company, will, in all likelihood, involve the sale of additional equity, debt or convertible debt securities, which could result in additional dilution to the Company's shareholders. Additionally, the Company will, from time to time, consider the acquisition of or investment in complementary businesses, products, services and technologies, which might impact the Compan

Results of Operations

The Company conducted no revenue-producing activity the quarter and six months ended February 28, 1999 as compared to $8,076 and $34,347 for the quarter and six months ended February 28, 1998 respectively. The revenue for the quarter and six months ended February 28, 1998 was derived solely from the Past Business. Other than advancing additional funds to AMJ to assist in inventory financing in connection with agreements with AMJ and the continuing development and implementation of

Company's Business Plan.

Since joining the Company, Mr. Frank Harrison, elected president of the Company on May 6, 1998, with the assistance of Mr. Albert Miller and Pierre Korsmoe, who were elected as non-voting advisory members of the Company's Board of Directors, has been developing a new operational and financial restructuring plan for the Company. Mr. Miller has since been elected as chairman of the Company's Board of Directors (with voting power) and Mr. Korsmoe has been elected as the Company's chief finan

The Business Plan requires substantial additional financing, and there can be no assurance that the Company can obtain such financing or that, even if such financing is obtained, the Business Plan will be successful or will produce any revenue or income for the Company. Pursuant to the Business Plan, the Company plans to operate as a holding company, with its primary operations conducted through subsidiaries. Effective January 19, 1999, the Company formed Terminator Technologies, Inc

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utilize Terminator Technologies, Incorporated as a manufacturing and marketing facility for the Company's products and Term Tex Corporation as a research and development facility for the Company's products. Neither the Company nor either of the subsidiaries have or have obtained, or entered into any agreements or arrangements to obtain, the financing necessary to implement the Business Plan and there can be no assurance that such financing can or will be obtained.

Pursuant to the Business Plan, the Company intends to devote its primary focus to the retail market and the development, production and marketing of: (a) a series of pest control products for the home and garden, with an emphasis on products that (i) are safe for humans (particularly children), pets and wildlife, (ii) are environmentally friendly, (iii) are low cost, (iv) utilize attractive designs, and (v) are user-friendly; and (b) other products related to safety. There can be no assur

Option Agreement with AMJ.

In connection with the Business Plan, on January 19, 1999 the Company entered into an agreement (the "Option Agreement") with AMJ Resources Corporation ("AMJ"), a shareholder of the Company, which Agreement was amended on October 4, 1999. Pursuant to the Agreement as originally executed, among other things, (i) the Company acquired AMJ's rights to use, manufacture and sell three (3) separate products (Terminator Night Owl™ (a flea trap), Terminator Flower Trap™ (various i

Notwithstanding AMJ's relationship to the Company as a significant shareholder, and the relationship of Messrs. Miller and Korsmoe as employees of AMJ and as non-voting advisory directors to the Company (Mr. Miller later was elected as chairman of the Company's board of Directors and Mr. Korsmoe was elected as the Company's principal financial and accounting officer), there can be no assurance that the Option Agreement will result in any revenue or income for the Company, that the Company

AMJ is a Delaware corporation, the stock of which is owned by Mr. Miller's daughter, grandson and an irrevocable trust, the beneficiaries of which are members of Mr. Miller's family. Mr. Miller is neither a beneficiary or trustee of the family trust nor a shareholder, officer or director of AMJ.

Assignment by AMJ.

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Additionally, in connection with the Business Plan, on January 19, 1999 AMJ and the Company entered into an Assignment Agreement (the "Assignment") which was also amended on October 4, 1999. Pursuant to the Assignment, among other things, AMJ assigned to the Company all of AMJ's rights under a license agreement dated June 16, 1998 between AMJ and Terminator Turtle™ L.P. (the "License Agreement"), in exchange for the Company assuming all of AMJ's obligations under the Licen

Under the Assignment, among other things, (i) Terminator Turtle™ L.P., a California limited partnership ("TTLP"), assigned its rights to the Terminator Turtle^TM and Terminator Turtle Bait Tray ^TM (collectively, "Terminator Turtle") to the Company. (TTLP had acquired those rights from Albert Miller, the inventor of the Terminator Turtle™); (ii) the Company was granted until December 31, 2009, exclusive worldwide use of the patent relating to the Terminator

There can be no assurance that the Company will obtain financing necessary to manufacture and distribute the Terminator Turtle™ or that the Assignment will have any ultimate realizable value to the Company or will result in any revenue or income to the Company.

The Company's Product(s).

Terminator Turtle™ is an easy to use snail and slug control system which was designed as a safe alternative to existing snail and slug killing products which can be extremely dangerous to children, pets and wildlife. The Terminator Turtle™ encompasses two products: (a) The Terminator Turtle Bait Station™ - a metal turtle-shaped enclosure that keeps the bait away from children and animals; and (b) The Terminator Turtle Bait Tray™ - a disposable plastic tray containi

The Company believes that nearly all existing snail and slug control products involve dispensing poisonous pesticide granules or powder directly on the snail, thus, creating a hazard to children, pets, wildlife and the environment, particularly when the pesticide filters through the soil into the groundwater and into rivers and reservoirs. Such snail and slug bait when exposed to sun, rain and water also deteriorates quickly, thus requiring more poison to be effective.

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The snail and slug bait in the Terminator Turtle Bait Tray™ is enclosed in the steel Turtle, safely isolated from children, pets, wildlife and the elements. Protected from rain, watering and the sun, the enclosed bait is effective for at least three or four weeks, and because the bait does not touch the soil, it does not effect the groundwater.

AMJ test-marketed the Terminator Turtle™ in the Northwest United States in 1997, for a period of six weeks, selling all 50,000 units made available. AMJ also completed EPA registration for the Terminator Turtle Bait Tray™ in all 50 states. After the test-market, AMJ made additional modifications to the Terminator Turtle™ design and completed fabrication on the high volume tooling needed to produce the Terminator Turtles™ in large quantities at a low cost. AMJ has a

The Company intends to sell the Terminator Turtle Bait Station™ (including one Terminator Turtle Bait Tray™) at a suggested retail price of $9.95 per unit and replacement Terminator Turtle Bait Trays™ at $4.95 per unit. The Company intends to market its retail products directly to retailers who will market to consumers by the use of point of purchase displays that are strategically placed by retailers in their outlets. The display for the Terminator Turtles™ and 24 free-standing unit with a printed 4-color promotional picture of the Turtle on top.

Manufacture and Marketing. The Company presently intends to outsource all manufacturing functions for its product(s). At present, the Company has no facilities capable of manufacturing its product(s) and is not a party to any formal agreements with respect to manufacturing of its product(s). In the past, AMJ has outsourced the manufacture of the Terminator Turtle™ and has agreed to assign its rights to manufacturing agreements to the Company. AMJ has inventory of finished and oducts and parts for approximately 200,000 Terminator Turtles™ a portion of which were partially financed with funds advanced by the Company in late 1998 and early 1999. AMJ has verbally agreed to transfer the inventory to the Company at AMJ's cost (less any amounts advanced by the Company). The Company has not independently verified the amount of such inventory or the cost. Moreover, the Company does not have, nor has it made any arrangements for, the financing necessary to manufacture product(s) or

The Company intends to market its product(s) through its wholly owned subsidiary Terminator Technologies, Inc. Neither the Company nor Terminator Technologies, Inc. have any contractual commitments or arrangements relating to the marketing or sale of product(s). Terminator Texas has agreements with independent sales representatives on a nonexclusive basis to market and sell the Terminator Turtle™ and has verbally agreed to assign those agreements to the Company or its subsidiary. Th

Notwithstanding the foregoing agreements, the Company does not have the financial resources to manufacture or distribute any products and the only product that is market ready is the Terminator Turtle™ and Bait Tray. The other products require additional development.

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There can be no assurance that the Company can or will obtain the financing necessary to take advantage of the Option Agreement or the Assignment.

Since the Company has not yet obtained financing to implement its plans with respect to the Terminator Turtle™ or any other product, there can be no assurance that such financing will be obtained and there can be no assurance that the Company's plans for the Terminator Turtle™ or any other product will be realized or successful.

Option Agreement with AMJ. On October 4, 1999 the Company and AMJ agreed to amend the Option Agreement to eliminate the condition of subsequent pricing and to lengthen the terms to the life of existing and pending patents and to provide for the Company reimbursing AMJ's actual costs for the development of the Products.

Assignment by AMJ. On October 4, 1999 the Company and AMJ agreed to amend the Assignment so that (a) AMJ would receive a cashless warrant to acquire 2,000,000 shares of the Company's common stock at $0.05 per share; (b) the warrant would expire on November 10, 2001 but would not be exercisable until September 11, 2000; (c) the conditions to effectiveness of the Assignment were eliminated; and (d) the royalty from the Company to AMJ was eliminated.

Agreement with Speed Release Lock Company. On October 5, 1999, the Company entered into a Stock Purchase and Exchange Agreement (the "Speed Release Agreement") with Speed Release Lock Company ("Speed Release") and Mr. Steve Bedowitz. Pursuant to the Speed Release Agreement, among other things, (i) Mr. Steve Bedowitz, president and majority shareholder of Speed Release, purchased an option exercisable upon 60 days prior written notice, at a price of $40,000 paid to the Company, to p

The Company and Speed Release have entered into discussions regarding a possible business combination. However, such discussions are preliminary in nature and there can be no assurance that such discussions will result in any further agreement between the Company and

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Speed Release or that if any additional agreement is reached that it will add any value to the Company.

Speed Release is engaged in the manufacture and sale of safe and reliable firearm safety products to prevent the unauthorized use of firearms, including unintentional discharge by children and assailants. Speed Release's mission is to both market and manufacture firearm safety locks that maximize the user's ability to operate the device quickly in an emergency situation, while prohibiting unauthorized users from using the firearm.

Speed Release manufactures and markets a keyless, programmable, trigger lock that fits most firearms (the "Lock"). Speed Release began selling the Lock in 1997 and since then, the Lock has been sold through a number of catalogs and retail establishments, as well as to a number of law enforcement groups and the military.

The Lock is a computerized device that fits over the trigger guard of 98% of all firearms, preventing the movement of the trigger. As a result, the unintentional firing of the firearm is prevented. The Lock contains five translucent buttons, which illuminate in dark or dim light. There are 38,000 programmable codes available for the device, making it extremely difficult to open without knowledge of the passcode and therefore resistant to tampering by children and other unauthorized users.

In the future, Speed Release hopes to employ the concepts used in the Lock for other purposes, such as electronic bicycle locks. The Company recently filed a patent application with the United States Patent Office on the Lock that, if granted, will be owned entirely by Speed Release.

Speed Release has informed the Company that Speed Release believes that (i) no other company employs technology similar to the Lock; (ii) Speed Release's largest competitors are gun safes and key locks; (iii) there are several more sophisticated safety devices that are much more expensive, making them cost prohibitive for many gun owners, and (iv) unlike these other devices, the Speed Release Lock is affordable, easy to operate and makes the firearm easily accessible to its users.

Speed Release was founded in 1996 by the Company's principal shareholder, Steve Bedowitz. In 1991, Speed Release acquired Trigger Block, Inc., the founder of the concept of the Speed Release Lock. Mr. Bedowitz is 57 years old and has successfully built and managed several successful companies. In March 1980, Mr. Bedowitz founded American Remodeling, Inc. ("AMRE"), a company specializing in home siding, with an initial investment of $3,000. When Mr. Bedowitz sold his interest in AMRE in 19

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The Lock competes with a number of products that reduce the risk of firearm misuse. These products include other types of gun locks and gun safes. Speed Release believes, however, that its Lock is superior to these products in that it is easier to use in an emergency situation. Firearm safes clearly offer a high level of security from both theft and unauthorized use; however, their high cost prohibits many firearm owners from using them. Furthermore, firearm safes hinder an owner's acces s

Speed Release focuses its marketing strategy to current as well as future firearm owners. Its advertisements are geared toward men over 25 years old with at least a high school education and incomes in excess of $35,000. The Lock has been featured in a number of hunting, shooting and law enforcement magazines such as Shooting Times, Sports Afield, Clay Shooting, Buckmasters, Field & Stream, Gun World, Skeet Shooting Review, The Chief of Pol

Due to the rise of firearm violence and in light of the number of children engaging in violence with handguns and rifles, there has recently been increased interest in requiring firearm users to keep unauthorized users from using firearms. Congress is currently considering legislation which would require that a gun lock be sold with every new firearm sold in the United States. In addition, a number of states have passed laws requiring gun locks for every firearm sold within the state. Suc

At December 31, 1998, Speed Release had total assets of $390,507 and a shareholders' deficit of ($1,192,751). For the years ended December 31, 1998 and 1997, Speed Release had revenues of $217,634 and $87,192, respectively, and operating losses of ($588,612) and ($1,214,191), respectively. Speed Release's net losses in 1998 were ($697,359), compared to ($1,334,934) during 1997.