OUTLOOK SPORTS TECHNOLOGY INC, 424B3, 1999-03-23

OUTLOOK SPORTS TECHNOLOGY INC
424B3, 1999-03-23
SPORTING & ATHLETIC GOODS, NEC

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Filed Pursuant to Rule 424(B)(3)
Registration No. 333-58631

PROSPECTUS

OUTLOOK SPORTS TECHNOLOGY, INC.

400,000 SHARES OF CLASS A COMMON STOCK

Outlook Sports Technology, Inc., a Delaware corporation (the "Company"),
hereby offers 400,000 shares of Class A Common Stock, par value $0.01 per share
(the "Class A Common Stock"). The shares of Class A Common Stock offered hereby
are sometimes hereinafter referred to as the "Securities."

Prior to this offering (the "Offering") there has been no public market for
the Class A Common Stock and there can be no assurance that any such market will
develop. The initial public offering price of the Class A Common Stock has been
determined by negotiations between the Company and Kashner Davidson Securities
Corporation, as representative of the Underwriters (the "Representative") and is
not necessarily related to net asset value, projected earnings or other
established criteria of value. See Underwriting. The Company anticipates that
the Class A Common Stock will be quoted on the OTC Electronic Bulletin Board
under the symbol TGRA.

The Securities offered by this Prospectus are being offered by the
Underwriters on a "firm commitment" basis subject to prior sale, when, as and if
accepted by the Underwriters, approval of certain legal matters by counsel for
the Underwriters and certain other conditions. The Underwriters reserve the
right to withdraw, cancel or modify such offer without notice and reject any
order in whole or part. It is expected that delivery of the certificates
representing the Securities will be made in New York, NY on or about March 24,
1999.

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE SUBSTANTIAL DILUTION FROM THE PUBLIC OFFERING PRICE.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER THE
CAPTION "RISK FACTORS" WHICH APPEAR BEGINNING ON PAGE 10 OF THIS PROSPECTUS.

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

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) COMPANY(2)
<S> <C> <C> <C>
Per Share................................................ $5.80 $.493 $5.307
Total (3).......................................... $2,320,000 $197,200 $2,122,800
</TABLE>

(1) Does not reflect additional compensation to be received by Kashner Davidson
Securities Corporation (the "Representative") in the form of: (i) a
non-accountable expense allowance equal to 3% of the gross proceeds of this
Offering or $69,600 ($80,040 if the Underwriter's over allotment option
described in footnote 3 is exercised in full), (ii) an option to purchase up
to 40,000 shares of Class A Common Stock at 165% of the initial public
offering price (the "Representative's Warrants"), exercisable for a period
of four years, commencing one year after the effective date of the
Registration Statement of which this Prospectus is a part, and (iii) a
$75,000 consulting fee payable to the Representative upon the Closing of
this Offering. The Company and the Underwriters have agreed to indemnify
each other against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offering payable by the Company estimated
at approximately $741,800, including the Representative's non-accountable
expense allowance (assuming no exercise of the Underwriters' over-allotment
option).

(3) The Company has granted the Underwriters an option, exercisable within 45
days of the date hereof, to purchase up to an additional 60,000 shares of
Class A Common Stock, solely to cover over-allotments, if any. If the
Underwriters' over-allotment option is exercisable in full, the total Price
to Public, Underwriting Discount, and Proceeds to Company will be
$2,668,000, $275,400, and $2,442,600, respectively. See "Underwriting."

KASHNER DAVIDSON SECURITIES CORPORATION
The Date of this Prospectus is March 16, 1999
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

The Company intends to furnish to its security holders annual reports
containing audited financial statements and such other periodic reports as the
Company may determine to be appropriate or as may be required by law.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

Each purchaser of Securities in California must meet one of the following
suitability standards: (i) a liquid net worth (excluding home, furnishings and
automobiles) of $250,000 or more and gross annual income during 1998, and
estimated during 1998, of $65,000 or more from all sources; or (ii) a liquid net
worth (excluding home, furnishings and automobiles) of $500,000 or more. Each
California resident purchasing Securities offered hereby will be required to
execute a representation that it comes within one of the aforementioned
categories.

The Company uses and has applied to register in the United States the
following marks: TEGRA-TM-, TEGRA T (and design)-TM-, T (and design)-TM-, GOLF
FIRST-TM-, INVISIBLE INSET HOSEL-TM-, and NEMESIS-TM-. Other trademarks referred
to in this Prospectus are not owned by the Company and the Company makes no
claim of association with respect to those marks or their owners.

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY AND SHOULD BE READ IN
CONJUNCTION WITH THE MORE DETAILED INFORMATION, AND THE FINANCIAL STATEMENTS AND
NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE
INDICATED, THE INFORMATION IN THIS PROSPECTUS HAS BEEN ADJUSTED TO GIVE
RETROACTIVE EFFECT TO A NUMBER OF STOCK SPLITS AND REVERSE STOCK SPLITS AS
DESCRIBED IN NOTE 6 TO THE COMPANY'S FINANCIAL STATEMENTS INCLUDED ELSEWHERE
HEREIN AND ASSUMES (I) THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION HAS NOT BEEN
EXERCISED, AND (II) THAT THE REPRESENTATIVE'S WARRANTS HAVE NOT BEEN EXERCISED.
EACH PROSPECTIVE INVESTOR IS URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.

ON OCTOBER 7, 1998, THE COMPANY AMENDED ITS CERTIFICATE OF INCORPORATION TO
CREATE TWO CLASSES OF COMMON STOCK (15,000,000 SHARES OF CLASS A COMMON STOCK
AND 5,000,000 SHARES OF CLASS B COMMON STOCK) (THE "AMENDMENT"). ALL SHARES OF
THE COMPANY'S COMMON EQUITY OUTSTANDING PRIOR TO THE AMENDMENT WERE CONVERTED
INTO SHARES OF CLASS A COMMON STOCK EXCEPT FOR 1,464,953 SHARES OF COMMON EQUITY
OWNED BY MESSRS. BERGER AND DODRILL WHICH WERE CONVERTED INTO AN EQUAL NUMBER OF
SHARES OF CLASS B COMMON STOCK. THE CLASS A AND CLASS B COMMON STOCK HAVE
IDENTICAL RIGHTS, INCLUDING VOTING RIGHTS. EACH SHARE OF CLASS B COMMON STOCK
WILL BE AUTOMATICALLY CONVERTED INTO A SHARE OF CLASS A COMMON STOCK ON THE
EARLIER TO OCCUR OF (I) OCTOBER 31, 2000 OR (II) SUCH TIME AS THE CLOSING PRICE
OF THE CLASS A COMMON STOCK SHALL EQUAL OR EXCEED $8.00 FOR 10 CONSECUTIVE
TRADING DAYS. REFERENCES IN THIS PROSPECTUS TO "COMMON STOCK" ARE TO THE CLASS A
COMMON STOCK AND THE CLASS B COMMON STOCK COLLECTIVELY. SEE "DESCRIPTION OF
SECURITIES -- COMMON STOCK."

THE DISCUSSION IN THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT"), THAT INVOLVE RISKS AND UNCERTAINTIES. THE SAFE
HARBOR FROM PRIVATE ACTIONS BASED ON UNTRUE STATEMENTS OR OMISSIONS OF MATERIAL
FACT THAT IS PROVIDED BY THESE TWO STATUTORY PROVISIONS DOES NOT APPLY TO
STATEMENTS MADE IN CONNECTION WITH THIS OFFERING. THE COMPANY'S ACTUAL RESULTS
AND THE TIMING OF CERTAIN EVENTS MAY DIFFER MATERIALLY FROM THE RESULTS
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED
IN "RISK FACTORS," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION" AND "BUSINESS."

THE COMPANY

The Company is a designer and marketer of premium quality golf equipment,
apparel and accessories under the Tegra brand name. Tegra products represent a
wide range of technologically innovative, premium-priced men's golf clubs,
apparel and accessories that are sold in off-course golf specialty and on-course
pro shops. Tegra golf clubs incorporate the Company's patent-pending Invisible
Inset Hosel (the cylindrical chamber in which the shaft is attached to the club
head), a feature designed to reduce slice, and increase the accuracy and
distance of golf shots, and were introduced into the US market in October 1997.
The Company anticipates that a majority of its revenue will be generated through
sales of the Tegra driver, which incorporates the Invisible Inset Hosel design.
Company testing has shown that the Tegra driver provides greater carry, roll and
overall distance than certain leading premium-priced drivers while
simultaneously increasing accuracy and reducing slice. Tegra products are now
available in over 100 golf shops nationwide and the Company expects they will be
available in over 500 golf shops by the summer of 1999.

The Company's business strategy is to establish itself as a leading
designer, marketer and manufacturer of premium golf equipment, apparel and
accessories by providing a complete range of products at the premium-priced
segment of the golf market. The Company is implementing this strategy by: (1)
creating golf clubs with proprietary, visibly distinct technology and design
such as the Company's patent-pending Invisible Inset Hosel to differentiate the
Company from its competitors while pricing such products competitively, (2)
raising consumer demand for and awareness of the Company's products through a

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consolidated direct marketing campaign which will incorporate infomercials and
internet (electronic commerce) sales and (3) enhancing brand recognition through
professional golf endorsements of Tegra apparel and comprehensive in-store
merchandising installations called Tegra Retail Environments ("TRE's").

The Company was founded as Hippo, Inc. in 1996 and contemporaneously
acquired a license from Hippo Holdings, Ltd., a European golf equipment
manufacturer, to sell value-priced HiPPO-TM- brand golf equipment, apparel and
accessories in the United States. The Company's initial strategy was to sell
value-priced golf clubs that were presently available under the HiPPO-TM- brand
and to simultaneously develop a premium-priced golf club brand because that
segment of the golf market comprises approximately 70% of golf equipment sales
and offers higher margins to manufacturers. This development effort resulted in
the Tegra line of premium-priced golf equipment. The Company has since
discontinued the distribution of value-priced golf equipment to pursue
opportunities offered by its Tegra products. On May 4, 1998, the Company sold
its license to sell HiPPO-TM- products in the U.S. back to Hippo Holdings, Ltd.
along with all existing HiPPO-TM- inventory, marketing materials and related
liabilities. In return, the Company received a cash payment from Hippo Holdings,
Ltd. of approximately $413,000. In addition Hippo Holdings, Ltd. returned to the
Company 50,000 shares of the Company's Common Stock and assumed outstanding
liabilities and commitments of the Company in excess of $1,000,000.

INDUSTRY OVERVIEW. According to the National Golf Foundation ("NGF"), in
1997, wholesale sales of golf equipment in the U.S. were approximately $3.9
billion. In addition, wholesale sales of golf clubs are estimated to have
increased at an annual compound growth rate of approximately 10.9% over the
5-year period from 1992 to 1997. The Company believes that a number of trends
are likely to further increase the demand for golf products generally. These
trends include: (i) the large numbers of golfers entering their 40s and 50s, the
age when most golfers begin to play more often and increase their spending on
the sport; (ii) growth in the number of golf courses; (iii) increasing interest
in golf from women, junior and minority golfers; (iv) the large population who
are beginning to enter their 20s, the age when golfers generally take up the
sport; and (v) the rapid evolution of golf club designs and materials.

PRODUCTS. Tegra golf clubs which incorporate the Company's patent-pending
Invisible Inset Hosel are an evolution from current golf club technology. The
Company's design moves or insets the shaft as close to the center of the club
head as is permitted under USGA rules. As a result, the club head will rotate to
the target faster than conventional designs, making it easier to square the club
at impact and enabling the golfer to hit longer and straighter shots. The
Company believes that the Company's Invisible Inset Hosel technology could be as
significant to the golf industry as perimeter weighting, graphite shafts or
oversize metal woods.

The Company has conducted player testing on its woods and irons and the
Company believes such testing shows its Tegra technology promotes straighter and
longer golf shots than other leading premium-priced golf clubs. "Iron Byron"
testing (robotic testing designed to repeat identical swings so different clubs
can be compared under controlled conditions) of Tegra woods has shown that the
Tegra driver provides greater carry, roll and overall distance than certain
leading premium-priced clubs while simultaneously increasing accuracy.
Additional mechanical testing which has been recorded using high speed video
shows that the Invisible Inset Hosel design produces a squarer club face at
impact than other leading premium-priced clubs.

The Company has also developed a line of Tegra men's apparel. The Company's
apparel collection emphasizes quality, comfort and style and is intended to
enhance a golfer's on-course performance. The Company plans to initially focus
on golf outerwear, introducing a limited range of technical men's outerwear
which will be available to the consumer for the holiday 1999 selling season. For
the spring 2000 golf season the Company plans to expand its offering to include
a range of mens golf shirts, which can be custom embroidered for on-course golf
shops. Prior to reducing operations as a result of its cash flow

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needs, the Company had begun selling headwear featuring ergonomic closures and
intended to introduce items such as golf bags, umbrellas and towels.

One of the Company's strategies is to deliver products which can achieve
superior retail margin in order to incentivize retailers to sell more Tegra
product. The Company estimates that retailers on average achieve 20% gross
margin on sales from premium golf equipment. By pricing appropriately, the
Company believes it will be able to offer retailers products that can achieve
superior margin. The Company expects that, on average, Tegra golf clubs will
allow retailers to achieve 40% gross margin, while Tegra apparel will allow
retailers to achieve in excess of 50% gross margin.

MARKETING. The Company's advertising focuses on the Tegra driver and its
performance enhancing benefits, including the Invisible Inset Hosel. The Company
is presently developing a long format (30 minute) infomercial which is
anticipated to air in May 1999. This broadcast advertising is expected to be
supplemented with a direct response print campaign.

The Company anticipates that it will have a web site on the internet by
April, 1999. In addition, the Company is considering making products available
for direct internet purchases (electronic commerce), although no assurance can
be given as to when, or if, the Company will do so.

Tegra products were endorsed for the 1998 season by four touring
professionals. Tegra players won more than $2 million world-wide on tour. The
Company is revising its tour strategy in 1999 to focus on a large number of PGA
Tour professionals to endorse its products rather than signing large endorsement
contracts with one or two players. The Company has formed a unique tour program
which will begin March 29, 1999. Under this program PGA Tour professionals will
be compensated for wearing Tegra clothing and/or headgear and/or using a Tegra
driver. The Company anticipates that between 15 to 30 professional golfers will
endorse Tegra products in 1999, although no assurance can be given that the
Company will obtain such endorsements.

The Company's executive offices are located at 100 Grand Street, 5th Floor,
New York, New York 10013. The Company's telephone number is (212) 966-0400.

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THE OFFERING

<TABLE>
<S> <C>
Securities Offered (1).......... 400,000 shares of Class A Common Stock.
Securities Outstanding Prior to
the Offering (2).............. 2,169,075 shares of Class A Common Stock and 1,464,953
shares of Class B Common Stock.
Securities Outstanding
Subsequent to the Offering
(2)(3)........................ 2,569,075 shares of Class A Common Stock and 1,464,953
shares of Class B Common Stock.
Use of Proceeds by the Company.. The net proceeds of this Offering will be used for
repayment of indebtedness, the purchase of inventory, the
payment of marketing and advertising expenses and working
capital and other corporate purposes. See "Use of
Proceeds."
OTC Board Symbols............... Class A Common Stock -- TGRA
</TABLE>

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(1) Assumes the Underwriters' over-allotment option is not exercised.

(2) The Class A Common Stock and the Class B Common Stock have identical rights,
including voting rights. Each share of Class B Common Stock will
automatically convert into one share of Class A Common Stock on the earlier
to occur of (i) October 31, 2000 and (ii) such time as the closing price of
the Class A Common Stock shall equal or exceed $8.00 for 10 consecutive
trading days. Does not include an aggregate of 4,189,242 Warrants which are
comprised of (i) 2,976,757 Warrants which were issued as part of a bridge
financing and the conversion of other obligations ("Bridge and Conversion
Warrants") which are to be identical to any publicly traded Warrants the
Company may in the future issue and (ii) 1,212,485 Warrants at exercise
prices ranging from $.75 to $4.00 and which expire at times ranging from
September 25, 2001 to January 15, 2003. Does not include up to 781,309
shares of Class A Common Stock which are issuable upon the exercise of
options outstanding under the Company's stock option plans. See
"Management--Stock Option Plans." Does not include 125,000 shares of Class A
Common Stock which the Company has agreed to purchase from three
shareholders at a price of $.25 per share. Such shares were originally
issued to Argent Securities, Inc. ("Argent") and Argent subsequently
transferred such shares to the three shareholders.

(3) Does not include (i) 60,000 shares of Class A Common Stock issuable by the
Company upon the exercise of the Underwriters' over-allotment option and
(ii) , the 40,000 shares of Class A Common Stock issuable upon exercise of
the Representative's Warrants. See "Management -- Stock Option Plans,"
"Description of Securities" and "Underwriting."

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RISK FACTORS

The Company does not presently have adequate cash from operations or
financing activities to meet either its short-term or long-term needs. In
addition, the Company's obligation to repay approximately $375,000 of bridge
debt which has not been converted to equity and matured on September 30, 1998 or
October 15, 1998 has not been met. The Company has an additional obligation to
repay $250,000 plus accrued interest to certain investors on April 9, 1999, and
the Company has an additional obligation to repay $225,000 plus accrued interest
to certain investors within five business days of the closing of an initial
public offering. The Company does not have sufficient cash to repay these
obligations and is currently negotiating with the holders of this debt to extend
the maturity date. The Company anticipates incurring an additional $200,000 in
debt prior to the effective date of the Registration Statement. The Company
expects to repay this debt from the proceeds of this offering. See "Use of
Proceeds." The Company has not paid any of its employees since October 1998. The
Company is indebted to employees, exclusive of Messrs. Berger and Dodrill, in
the approximate aggregate amount of $450,000. The Company anticipates that it
will repay these obligations on a monthly payment schedule during 1999. If this
offering is not successful, the Company expects that it will seek alternative
private financing or seek to sell the Company if an interested buyer can be
found. If no alternative private financing can be secured and no buyer can be
found, the Company expects that it will seek protection from its creditors under
the applicable bankruptcy laws. See "Risk Factors -- Lack of Cash." There can be
no assurance that the Company will be able to achieve its business goals or ever
achieve profitability. See "Risk Factors -- Precarious Financial Condition", "--
Ability to Continue as a Going Concern," and "-- History of Losses; Anticipation
of Future Losses." The Company is substantially dependent on the efforts of its
founders and principal officers who have no proven record of success in
designing, marketing or manufacturing retail products. See "Risk Factors -- Lack
of Experience of Management."

RECENT TRANSACTIONS

Since October, 1998, the Company has consumed all cash on hand and has
funded its operations with cash flow and loans from outside investors totaling
$225,000. Such loans shall be repaid together with accrued interest thereon from
the proceeds of this offering. See "Use of Proceeds" and "Certain Transactions."

In November 1998, the Company executed exchange agreements (the "Exchange
Agreements") with certain unaffiliated noteholders whereby such note holders
exchanged an aggregate of $5,210,236 principal amount of indebtedness plus
accrued interest for 1,042,047 shares of Common Stock and 1,042,047 Warrants. At
January 31, 1999, $375,000 of such debt had not been converted and remains due
and owing. In addition $911,048 which the Company had borrowed from certain
officers or persons affiliated with officers of the Company was also converted
in November 1998 into 182,210 shares of Common Stock and 182,210 Warrants.

On March 10, 1999, the Company agreed to purchase from three shareholders an
aggregate of 125,000 shares of the Company's Class A Common Stock at a purchase
price of $0.25 per share. Such shareholders acquired these shares of Class A
Common Stock from Argent Securities, Inc. Argent Securities, Inc. received the
securities in connection with a consulting agreement between it and the Company,
dated April 29, 1998.

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SUMMARY FINANCIAL DATA

The following summary financial data, insofar as it relates to the period
February 8, 1996 (inception) to January 31, 1997 and the year ended January 31,
1998, has been derived from the Company's audited financial statements,
including the balance sheets at January 31, 1997 and 1998 and the related
statements of operations, of changes in shareholders' deficit and of cash flows
for the periods then ended, and notes thereto appearing elsewhere herein. The
data for the nine months ended October 31, 1997 and 1998 has been derived from
unaudited financial statements also appearing herein and which, in the opinion
of management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the unaudited
interim periods. The summary financial data should be read in conjunction with
the "Selected Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Company's financial
statements and notes thereto appearing elsewhere herein.

<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 8,
1996 FOR THE FOR THE NINE MONTHS
(INCEPTION) TO YEAR ENDED ENDED OCTOBER 31,
JANUARY 31, JANUARY 31, ----------------------------
1997 1998 1997 1998
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue............................................ $ -- $ 741,120 $ 555,681 $ 479,463
Total costs and expenses........................... $ 2,375,708 $ 5,190,123 $ 3,253,187 $ 5,602,274
Loss from operations............................... $ (2,375,708) $ (4,449,003) $ (2,697,506) $ (5,122,811)
Interest expense................................... $ (2,844) $ (244,648) $ (146,120) $ (495,943)
Gain on sale of license............................ $ -- $ -- $ -- $ 413,997
Net loss........................................... $ (2,378,552) $ (4,693,651) $ (2,843,626) $ (5,204,757)
Basic and diluted net loss per share (1)........... $ (3.24) $ (2.21) $ (1.38) $ (2.10)
Weighted average number of shares outstanding...... 734,330 2,120,460 2,060,182 2,483,509
</TABLE>

<TABLE>
<CAPTION>
OCTOBER 31, 1998
JANUARY 31, ----------------------------------------------
---------------------------- AS
1997 1998 ACTUAL PRO FORMA(2) ADJUSTED(2)(3)
------------- ------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets..................... $ 26,850 $ 650,792 $ 383,963 $ 577,713 $ 1,655,913
Working capital deficiency......... $ (1,306,705) $ (5,056,682) $ (9,903,931) $ (3,748,900) $ (2,170,700)
Total assets....................... $ 227,347 $ 1,005,055 $ 775,631 $ 969,381 $ 2,122,581
Total liabilities.................. $ 1,373,555 $ 5,747,474 $ 10,327,894 $ 4,366,613 $ 3,866,613
Total shareholders' deficit........ $ (1,146,208) $ (4,742,419) $ (9,552,263) $ (3,397,232) $ (1,744,032)
</TABLE>

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(1) Due to the Company's losses from continuing operations, the Company's
diluted loss per share is the same as that of basic loss per share.

(2) Gives effect to the (i) exchange of an aggregate of $6,121,284 principal
amount (includes $5,280,000 of notes payable and $274,147 of advances from
officers) of indebtedness plus accrued interest (of which $25,003 was
incurred subsequent to October 31, 1998 on a pro forma basis) for an
aggregate of 1,224,257 shares of Common Stock and 1,224,257 Warrants (ii)
issuance of 18,000 shares of Class A Common Stock (at an aggregate fair
value of $90,000) in connection with $225,000 of debt which was incurred by
the Company between October 31, 1998 and the date of this Prospectus; and
(iii) the repurchase by the Company of 125,000 shares of Class A Common
Stock originally issued to Angent in April 1998 for $31,250. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

(3) Adjusted to (i) give effect to the sale of 400,000 shares of Class A Common
Stock offered hereby at an assumed initial public offering price of $5.80
per share after deducting estimated offering expenses of $741,800, (ii)
includes a $75,000 fee payable by the Company to the Representative upon
closing of this offering pursuant to a two year consulting agreement between
them and (iii) includes repayment of $475,000 of notes payable and $25,000
of advances to officers after offering. See "Use of Proceeds." No effect has
been given to the exercise of (i) the Underwriter's over-allotment option,
(ii) the Representative's Warrants, or (iii) the Bridge Warrants. See
"Underwriting" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

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RISK FACTORS

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SUBSTANTIAL DILUTION, AND SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. PROSPECTIVE INVESTORS SHOULD
CONSIDER CAREFULLY THE FOLLOWING FACTORS AS WELL AS OTHER INFORMATION IN THIS
PROSPECTUS, INCLUDING THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS
HEREIN, PRIOR TO PURCHASING THE SECURITIES.

LACK OF CASH

The Company does not presently have adequate cash from operations or
financing activities to meet either its short-term or long-term needs. In
addition, the Company's obligation to repay $375,000 of bridge debt matured on
September 30, 1998 or October 15, 1998, an additional $225,000 of bridge debt
will become due within five business days of the closing of an initial public
offering and an additional $250,000 is due April 9, 1999. The Company has not
paid any of its employees since October 1998. The Company is indebted to its
employees, exclusive of Messrs. Berger and Dodrill, in the approximate aggregate
amount of $450,000. The Company has had discussions with its current and former
employees which it has not paid in an attempt to formulate a repayment plan,
which discussions have included a proposal by the Company to pay such persons an
amount in excess of the sums due to such persons, which additional amount may be
paid to such persons in the form of equity. The Company anticipates that the
additional equity payment will not exceed an aggregate value of $300,000. The
Company does not have sufficient cash to repay all of these obligations. The
Company expects to repay a portion of this debt from the proceeds of this
offering. See "Use of Proceeds." If this offering is not successful, the Company
expects that it will seek alternative private financing or seek to sell the
Company if an interested buyer can be found. If no alternative private financing
can be secured and no buyer can be found, the Company expects that it will seek
protection from its creditors under the applicable bankruptcy laws.

PRECARIOUS FINANCIAL CONDITION

For the year ended January 31, 1998, the Company incurred net losses of
$4,693,651, and for the nine months ended October 31, 1998, the Company incurred
net losses of $5,204,757. As of October 31, 1998, the Company had $73 in cash
and an accumulated deficit of $12,276,960. The Company's current liabilities, as
of such date, aggregated $10,287,894 and exceeded the Company's current assets
by $9,903,931. Subsequent to October 31, 1998, holders of Notes representing an
aggregate of $6,121,284 of principal and accrued interest have executed an
agreement with the Company to convert their debt to equity in the Company at the
rate of $5.00 of debt for one share of Common Stock and one Warrant. The Company
does not presently have adequate cash from operations to meet either its long
term or short term needs. In order to meet its needs for cash to fund its
operations, the Company must obtain additional financing. The Company is
currently in default under a number of its arrangements, agreements and
instruments with creditors. If this Offering is not successful or if the Company
is unable to obtain significant additional financing, it may be obligated to
seek protection from its creditors under the bankruptcy laws and the existing
stockholders may lose their investment. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources"; and the financial statements and notes thereto included
elsewhere in this Prospectus.

ABILITY TO CONTINUE AS A GOING CONCERN

The Company's independent certified public accountants have issued their
report dated June 9, 1998 on the financial statements of the Company as of
January 31, 1998 and for the year then ended, which includes an explanatory
paragraph expressing substantial doubt about the Company's ability to continue
as a going concern. Among the reasons cited by the independent certified public
accountants as raising substantial doubt as to the Company's ability to continue
as a going concern are the following: the Company has suffered recurring losses
and negative cash flows from operations through January 31, 1998, has a
shareholders' deficit and working capital deficiency as of January 31, 1998, and
is dependent on

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raising additional financing in order to fund its existing level of operations.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. If this Offering is not successful or if the Company is unable
to secure significant additional financing, it may be obliged to seek protection
under the bankruptcy laws and the stockholders may lose their investment. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources"; and the financial statements and
notes thereto included elsewhere in this Prospectus.

HISTORY OF LOSSES; ANTICIPATION OF FUTURE LOSSES

The Company has incurred operating losses since its inception and had an
accumulated deficit of $12,276,960 as of October 31, 1998. The Company incurred
a net loss of $4,693,651 for the twelve months ended January 31, 1998, as
compared with a net loss of $2,378,552 for the period ended January 31, 1997.
The Company incurred a net loss of $5,204,757 for the nine months ended October
31, 1998, as compared with a net loss of $2,843,626 for the nine months ended
October 31, 1997. Such losses have resulted principally from expenses incurred
from general and administrative costs, research and development and marketing
costs incurred during the Company's development efforts. The continued
development of the Company's business will require the commitment of substantial
resources to establish sales and marketing capabilities. The amount of net
losses and the time required by the Company to reach sustained profitability are
highly uncertain, and to achieve profitability the Company must, among other
things, successfully establish sales and marketing capabilities by itself or
with third parties. There is no assurance that the Company will ever generate
substantial revenues from its products or achieve profitability. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

LACK OF EXPERIENCE OF MANAGEMENT

The Company is substantially dependent on the efforts of its founders and
principal officers. The Company was founded in 1996 and only entered the market
for premium-priced golf products in the Fall of 1997. Management has no proven
record of success in designing, marketing or manufacturing retail products. The
golf market is a highly competitive market for personnel and new personnel could
be costly in terms of cash compensation or equity necessary to attract them to
the Company or may not be available to the Company on any terms. The Company
currently has no employment contracts or non-competition agreements with, nor
does it carry key man life insurance for, any of its founders or principal
officers.

DEPENDENCE ON OFFERING PROCEEDS

The Company's capital requirements have been and will continue to be
significant. The Company is dependent on and intends to use a substantial
portion of the proceeds of this Offering and cash from operations to fund
purchases of inventory and implement its marketing strategies including the
production of an infomercial. The Company also plans to use approximately
$500,000 of the proceeds of this Offering to repay indebtedness. See "Use of
Proceeds." In the event that the Company's plans change, its assumptions change
or prove to be inaccurate or if the proceeds of this Offering or cash flows
otherwise prove to be insufficient to fund operations (due to unanticipated
expenses, delays, problems, difficulties or otherwise), the Company will be
required to minimize cash expenditures and/or obtain additional financing in
order to support its plan of operations. The Company has no current arrangements
with respect to, or sources of, additional financing and there can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all. See "Use of Proceeds" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

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LIMITED HISTORY

The Company has a limited operating and financial history for potential
investors to consider in assessing the advisability of an investment in the
Company. The Company must, therefore, be considered to be subject to all of the
risks inherent in the establishment of a new business enterprise, including the
absence of any significant operating history, any significant revenues, losses
from continuing operations and the presence of outstanding payables and
significant commitments, along with the uncertainties of the development and
marketing of new products. The Company's prospects must be considered in light
of the risks, expenses and difficulties frequently encountered by new businesses
in a highly competitive industry. To date the Company has achieved limited sales
and during the year ended January 31, 1998 the Company incurred losses of
$4,693,651 on revenues of $741,120. To address these risks, the Company must,
among other things, successfully increase the scope of its operations, respond
to competitive and technological developments, continue to attract, retain and
motivate qualified personnel and continue to develop and obtain market
acceptance of its products. There can be no assurance that the Company will be
successful in addressing these risks and challenges. See "-- Lack of Experience
of Management."

LITIGATION

The Company has received a letter from Tatsuya Saito requesting that the
Company review its TEGRA line of clubs in view of a patent issued to him on July
12, 1994 (the "Saito Patent"). The Saito Patent covers certain aspects of a club
head and hosel, including the positioning of the hosel inset relative to the
club head. The Company has referred this request to independent outside patent
counsel. The Company does not believe that the TEGRA line of clubs infringes any
of the claims of the Saito Patent; however, there can be no assurance that a
court will not conclude that one or more of the Company's products does not
infringe the Saito Patent, or any other patent. If Mr. Saito is successful in
asserting his patent, it could require the Company to alter or withdraw existing
products, delay or prevent the introduction of new products, or force the
Company to pay damages if the products have been introduced. See "--
Intellectual Property" and "Business -- Legal Proceedings."

The Company is a defendant in a lawsuit filed by Vardon Golf Company, Inc.
("Vardon") asserting that the Company's TEGRA woods and irons infringe one of
the claims of its patent issued on April 12, 1994 (the "Vardon Patent"). The
Vardon Patent includes claims directed to a number of aspects of a golf club
head and hosel, including claims directed to an extended radius of gyration,
which includes an aspect of the club head extending behind the hosel. Vardon
filed a complaint in the Northern District of Illinois, Eastern Division, on May
13, 1998, in which Vardon alleges that six companies have manufactured, sold,
offered to sell and distributed in the United States, specifically in the
Northern District of Illinois, wood-type and iron golf club products that are
covered by at least one claim of the Vardon Patent and a related design patent.
The Company does not believe that the TEGRA line of clubs infringes any of the
claims of these patents and the Company is in the process of preparing a
response to the complaint; however, there can be no assurance that a court will
not conclude that the Company does not infringe one or the other of these
patents, or both. If Vardon is successful in asserting its patent, it could
require the Company to alter or withdraw existing products, delay or prevent the
introduction of new products, or force the Company to pay damages if the
products have been introduced. See "-- Intellectual Property" and "Business --
Legal Proceedings."

The Company was the defendant in a lawsuit filed by TBWA Chiat/Day Inc.
("Chiat") in the Supreme Court of the State of New York on July 6, 1998 alleging
breach of contract for advertising services and that certain fees and expenses
in an amount of approximately $200,000 incurred by Chiat had not been paid by
the Company. The Company and Chiat have reached a settlement agreement in this
lawsuit pursuant to which the Company has agreed to pay Chiat $155,000. The
Company is currently in default of such settlement payment. See "Business --
Legal Proceedings."

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From time to time the Company has been threatened with, or named as a
defendant in, lawsuits in the ordinary course of its business. The Company's
management does not believe that any of these lawsuits are material. There can
be no assurance that one or more future lawsuits, if decided adversely to the
Company, would not have a material adverse effect on the Company's business,
financial condition and results of operations.

ARGENT LITIGATION

The Company has been named as a defendant, together with May Davis Group
("May Davis"), in a litigation brought in the United States District Court,
Southern District of New York on December 11, 1998 (Case Number 98CIV. 8772)
brought by Argent Securities, Inc. ("Argent"). Argent alleges that the Company
has breached a letter of intent with Argent whereby Argent was to act as the
underwriter of the Company's initial public offering of securities as well as a
Private Placement Agreement whereby Argent was to act as the placement agent of
the Company's private placement of securities. The complaint alleges that the
Argent is owed $20,557 by the Company for expenses and $1.5 million by the
Company for services performed by Argent for the benefit of the Company. The
complaint further alleges that May Davis was instrumental in interfering with
these contracts and Argent is seeking $1.5 million in damages from May Davis as
damages caused by such alleged tortious interference. Finally Argent is claiming
$1.5 million in damages against both the Company and May Davis, jointly and
severally, which is to equal lost revenues and future profits of Argent. The
Company believes these claims are without merit and intends to vigorously defend
itself against these claims. In the event the parties cannot resolve this
matter, the Company is also considering bringing counter claims against Argent.
There can be no assurance however, that the Company will be successful in
defending itself against these claims and if the Company were to lose such
litigation it would have a materially adverse effect on the Company and its
ability to continue operations.

POTENTIAL LAWSUIT FROM IAN WOOSNAM

The Company had extensive negotiations with an entity representing
professional golfer Ian Woosnam for in excess of one year in an attempt to reach
an agreement on the terms of a long term endorsement contract under which Mr.
Woosnam would endorse Tegra golf equipment, apparel and accessories. While these
negotiations were ongoing, Mr. Woosnam used Tegra golf equipment, apparel and
accessories while competing on the US and European PGA Tours. The Company and
Mr. Woosnam have been unable to reach agreement on the terms of the endorsement
contract and at this time negotiations have stopped. The Company has made offers
to Mr. Woosnam in an attempt to compensate Mr. Woosnam for the value of the
services he rendered during 1998. Should the Company and Mr. Woosnam be unable
to amicably reach an agreement regarding the value of the services rendered by
Mr. Woosnam, Mr. Woosnam may decide to pursue legal action against the Company.
In the event that Mr. Woosnam does file a lawsuit against the Company, the
Company will assert its defenses vigorously; however, no assurance can be made
that the Company will prevail or as to the damages which a court may assess
against the Company if Mr. Woosnam were to prevail in any such action.

DEPENDENCE ON PRODUCT INTRODUCTION

The Company believes that the introduction of new, innovative golf clubs
will be crucial to its future success. Prior to reducing operations as a result
of cash flow needs, the Company had just begun to sell products to retailers.
There can be no assurance that the Company's newly developed products will be
accepted by consumers or preferred by consumers over other companies' products.
There can also be no assurance that the Company will successfully develop new
products. New models and basic design changes are frequently introduced into the
golf club market but often meet with consumer rejection. Failure by the Company
to identify and develop products that achieve widespread market acceptance would
adversely affect the Company's future growth and profitability. Additionally,
successful technologies, designs and

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<PAGE>
product concepts are likely to be copied by competitors. Accordingly, the
Company's operating results could fluctuate as a result of the amount, timing
and market acceptance of new product introductions by the Company or its
competitors.

In addition the Company plans to introduce new apparel and accessories.
Prior to reducing operations as a result of cash flow needs, the Company had
only recently begun to sell some of these products to retailers. There can be no
assurance that the Company's apparel and accessories will be accepted by
consumers. There can also be no assurance that the Company will be able to
design or sell new apparel and accessories in the future. Failure of the
Company's current and planned apparel and accessories would adversely affect the
Company's future growth and profitability.

POTENTIAL CHANGES IN USGA REGULATIONS

The design of new golf clubs is also greatly influenced by rules and
interpretations of the United States Golf Association ("USGA"). Although the
golf equipment standards established by the USGA generally apply only to
competitive events sanctioned by that organization, it has become critical for
designers of new clubs to assure compliance with USGA Rules. The Company has
received an authorization letter from the USGA stating that the Tegra irons and
titanium metal woods conform with USGA Rules. Although the Company believes that
all future clubs designed by the Company will conform with USGA Rules, no
assurance can be given that any new products will receive confirmation of such.
In the past, the USGA has made changes in the rules and regulations governing
golf equipment. No assurance can be given that it will not do so in the future,
any such action by the USGA which changes the rules regarding golf equipment
could have a material adverse effect on the Company.

INTELLECTUAL PROPERTY

TRADEMARKS. The Company has applied in the United States for registration
of the following marks: TEGRA, TEGRA T (and design), T (and design), GOLF FIRST,
INVISIBLE INSET HOSEL, and NEMESIS. The Company has only applied to register the
mark TEGRA outside the U.S., and has only sought to register that mark in
Canada, the United Kingdom, Japan and Taiwan. The Company has received notices
of allowance from the U.S. Patent and Trademark Office ("PTO") for the marks
TEGRA, TEGRA T (and design), T (and design), and NEMESIS. While the Company has
undertaken U.S. trademark searches through standard trademark search channels
for some of the marks for which the Company seeks registration and the search
results reveal that these marks appear to be available for use and registration
in the U.S. in connection with golf clubs and some golf accessories and golf
related apparel, no assurance can be given that such searches uncovered all
existing or potentially conflicting marks. Outside the U.S., the Company has not
undertaken any trademark searches to determine whether any of these marks is
available for use or registration in connection with golf clubs, golf
accessories or golf related apparel.

No assurances can be given that any or all of the Company's applications for
these trademark registrations will be granted. Additionally, no assurances can
be given that any issued trademark registrations will give the Company exclusive
rights to use the marks with respect to all of the goods or services the Company
may propose to sell. The Company does not plan to introduce any product which is
covered by any third party U.S. or foreign trademark, registration or trademark
rights known to the Company. To date, there have been no interruptions in the
Company's business as the result of any claim of infringement. However, no
assurance can be given that the Company will not be adversely affected by the
assertion of intellectual property rights belonging to others. The effects of
such assertions could include requiring the Company to alter or withdraw
existing trademarks or products delaying or preventing the introduction of
products, or forcing the Company to pay damages if the products have been
introduced.

PATENTS. The Company has filed an application for a United States patent
claiming certain elements of the Company's Tegra line of inset woods and irons,
and the Company has filed a Patent Cooperation

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<PAGE>
Treaty patent application, designating all countries, that is based on such
United States patent application. Based on the results of a patent search
conducted by outside patent counsel, the Company is of the view that various
aspects of the Tegra line of woods and irons may be patentable, but no assurance
can be given that any of the foregoing patent applications or any future
application for a utility or design patent will be granted by the U.S. PTO or
any other PTO or, if a patent issues, as to the scope of any patent that might
issue, or that any such patent will prevent misappropriation or duplication of
the Company's products or similar products by competitors, or that the Company
will have the rights or resources to commercialize products on the basis of any
new patents. There can be no assurance that any issued patents will provide the
Company with significant competitive advantages, or that challenges will not be
instituted against the validity or enforceability of any patents owned by the
Company or, if instituted, that such challenges will not be successful. The cost
of litigation to uphold the validity of a patent and prevent infringement can be
very substantial and could be beyond the Company's financial means, even if the
Company could otherwise prevail in such litigation. Furthermore, there can be no
assurance that others will not independently develop similar designs or
technologies, duplicate the Company's designs and technologies or design around
the patented aspects of the Company's technology.

There are numerous patents granted with respect to golf technology, and the
Company cannot provide any assurances that any particular product of the Company
will not infringe any issued patent or any patent that issues in the future from
an application that is currently pending with any of the PTOs, or will not
infringe any other right of any third party. As stated in "Risk
Factors--Litigation", the Company has been notified by certain parties that the
Tegra brand products infringe on patents held by such parties. To date, there
have been no interruptions in the Company's business as the result of any claim
of patent infringement. However, no assurance can be given that the Company will
not be adversely affected by the assertion of intellectual property rights
belonging to others. The Company has not obtained an opinion from its patent
counsel that the Company's products do not infringe on the rights of others. The
effects of assertion of patent rights of third parties could include requiring
the Company to alter or withdraw existing products, delaying or preventing the
introduction of products, or forcing the Company to pay damages if the products
have been introduced. See "-- Litigation" and "Business -- Legal Proceedings."

GLOBAL ESTABLISHMENT OF TEGRA-TM- BRAND

The Company's business strategy includes the global use of the TEGRA brand
name. Successfully implementing this strategy requires that the Company create
recognition of the TEGRA brand, which is new to the golf industry and establish
trademark rights in the TEGRA and TEGRA T (and design) marks. Implementing this
strategy requires the commitment of substantial financial resources. There can
be no assurance that the proceeds of this Offering will be sufficient to
implement this strategy or that the Company will be able to obtain any
additional financing on acceptable terms or at all.

RISK OF RETAILERS' REFUSAL TO PLACE OR MAINTAIN TEGRA RETAIL ENVIRONMENTS

A component of the Company's corporate strategy is the installation of TREs
within stores of the Company's targeted Tegra retailers. There can be no
assurance, however, that such retailers will be willing to place the TREs in
their stores, or that, if such TREs are installed, their performance will meet
the Company's expectations. Moreover, there can be no assurance that, if such
TREs are installed, the retailers will agree to keep such TREs in place. This
risk is particularly high when, as is currently the case, the Company may not
have the resources to provide advertising and other marketing support to the
retailers in maintaining the TREs. The Company's failure to persuade such
retailers to place or keep TREs in their stores, or the failure of such TREs to
perform up to their expectations, would have a material adverse effect on the
Company's business.

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COMPETITION

The Company will face intense competition for customers because the golf
equipment and apparel industry is highly competitive and is characterized by the
frequent introduction of new products. The Company's competitors consist of
several well established domestic and foreign companies, the substantial
majority of which have significantly greater financial resources than the
Company, longer operating histories in the golf industry, well established
reputations, and marketing, distribution and service networks, larger product
lines than the Company, and greater management and technical resources.
Accordingly, many of these competitors will have greater financial resources to
devote to areas such as advertising, marketing and club development, and
consequently the cost of entry into the golf market is higher than in many
markets. A manufacturer's ability to compete is in part dependent upon its
ability to satisfy various subjective requirements of golfers, including the
golf club's "look" and "feel" and the level of acceptance that the golf club has
among professional and other golfers. Additionally, the apparel industry is
driven by, among other factors, fashion considerations and no assurance can be
given that the Company's designs will be accepted by consumers or preferred by
consumers over other companies' products.

SOURCES OF SUPPLY

As is the case with most golf club manufacturers, the Company will import
club heads and other components from companies in Asia, including companies
located in mainland China. In the event that the Company should fail to
establish adequate sources of supply, lose its sources of supply for these
materials and components, or experience delays in receiving delivery from such
sources, the Company would sustain shortages of materials and components and
incur delays in meeting delivery deadlines. The Company would also experience
such difficulties in the event that any supplier was unable or unwilling to meet
the Company's requirements. Any of these occurrences could have a material
adverse effect on the Company's operating results. Additionally, the Company
faces certain risks associated with importing goods from other countries such as
the risk of currency fluctuations, government imposed quotas, work stoppages,
political instability and the difficulty in enforcing contracts.

The Company relies on a limited number of suppliers for a significant
portion of the component parts used in the manufacture of its golf clubs. The
Company could in the future experience shortages of components or periods of
increased price pressures, which could have a material adverse effect on the
Company's business, operating results or financial condition. In addition,
failure to obtain adequate supplies or fulfill customer orders on a timely basis
could have a material adverse effect on the Company's business, operating
results or financial condition. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

SEASONALITY; DISCRETIONARY CONSUMER SPENDING

Golf is generally regarded as a warm weather sport and accordingly, sales of
golf equipment reflect a seasonality of market demand and have historically been
strongest in the first and second quarters of each year with the weakest sales
occurring during the fourth quarter. Due to the seasonality of the industry,
results from any one or more quarters are not necessarily indicative of annual
results or continuing trends. Additionally, quarterly results may vary from year
to year due to the timing of new product introductions by both the Company and
its competitors, advertising expenditures, promotional periods; competitive
pressures resulting in lower than expected average selling prices; and the
volume of orders that are received and that can be fulfilled in a quarter.
Additionally, due to the outdoor nature of the sport, golf sales are influenced
by the weather and inclement or unseasonable weather conditions can adversely
affect the Company's operating results. In addition, sales of golf clubs are
dependent on discretionary consumer spending, which may be affected by general
economic conditions. A decrease in consumer spending generally could result in
decreased spending on golf equipment, which could have a material adverse effect
on the Company's business, operating results and financial condition. Any one or
more of the above factors could result in the Company failing to achieve its
expectations as to future sales or net income.

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<PAGE>
Because in the short term most operating expenses are relatively fixed, the
Company may be unable to
adjust spending sufficiently in a timely manner to compensate in the event of
any unexpected sales shortfall. Any such failure by the Company could materially
adversely affect quarterly results of operations. If technological advances by
competitors or other competitive factors require the Company to invest
significantly greater resources than anticipated in research and development or
sales and marketing efforts, the Company's business, operating results or
financial condition could be materially adversely affected. Accordingly, the
Company believes that comparisons of its results of operations on a period to
period basis should not be relied upon as an indication of future performance.
Additionally, the results on any quarter are not indicative of results to be
expected for a full fiscal year. Fluctuations in operating results or any of the
numerous other factors discussed above or below may result in certain future
quarters in the Company's results of operations may be below the expectations of
public market analysts or investors. In these events, the market price of the
Common Stock and Warrants would be materially adversely affected.

RESPONSIBILITY FOR MARKDOWNS

In the apparel industry, the prices of products that are not sold by
retailers in a timely manner are often marked down. It is customary in the
industry for the seller of such products to share markdown costs with the
retailers and the Company anticipates that it will share such costs with, to the
extent they are incurred by, its major customers in order to maintain its
relationships with such customers.

POTENTIAL ACQUISITIONS

The Company may in the future pursue acquisitions of complementary services
or businesses. Future acquisitions may result in potentially dilutive issuances
of equity securities, the incurrence of additional debt, the write-off of costs,
and the amortization of expenses related to goodwill and other intangible
assets, all of which could have a material adverse effect on the Company's
business, operating results and financial condition. Future acquisitions would
involve numerous additional risks, including difficulties in the assimilation of
the operations, services and personnel of the acquired company, the diversion of
management's attention from other business concerns, entering markets in which
the Company has little or no direct prior experience and the potential loss of
key employees of the acquired company. The Company has not consummated any
acquisitions and currently has no agreements or understandings with regard to
any acquisitions. Shareholders will not vote on any potential acquisitions
(unless required by NASDAQ regulations or applicable law) nor have the
opportunity to review any potential acquisition candidate. See "--
Representative's Influence Over Potential Future Capital Financing."

BROAD MANAGEMENT DISCRETION IN USE OF PROCEEDS

The Company intends to use the net proceeds of the Offering for working
capital and general corporate purposes, including potential acquisitions.
Accordingly, the Company will have broad discretion with respect to the use of
the net proceeds of the Offering. Purchasers of Common Stock in the Offering
will not have the opportunity to evaluate the economic, financial or other
information that the Company will use to determine the application of such
proceeds. See "Use of Proceeds."

POSSIBLE ADVERSE EFFECT OF "PENNY STOCK" RULES ON LIQUIDITY FOR THE
COMPANY'S SECURITIES. Rule 3a51-1 under the Exchange Act categorizes any equity
security as a "penny stock" except in limited circumstances, including where the
equity security has a price of $5.00 per share or more (excluding any broker or
dealer commission, commission equivalent, mark-up or mark-down), where the
security is registered on a qualified national securities exchange or is a
reported security or where the issuer has net tangible assets (equal to total
assets less intangible assets and liabilities) exceeding $2,000,000 (as
demonstrated by financial statements dated less than 15 months prior to the date
of the transaction in question) and the issuer has been in continuous operation
for at least three years. Further, a security which is a unit composed of one or
more securities is not a penny stock under Rule 3a51-1 if the unit price divided
by the

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number of component shares of the unit that are not warrants is $5.00 per share
or more (excluding any broker or dealer commission, commission equivalent,
mark-up or mark-down) and any warrant component of the unit has an exercise
price of $5.00 per share or more. Rule 15g-9 under the Exchange Act imposes
sales practice requirements of broker-dealers which sell penny stocks to person
other than established customers (as defined in Rule 15g-9) or in other limited
circumstances, including requiring the broker-dealer, prior to any transaction
in a penny stock, to make a special suitability determination for the purchaser,
to receive the purchaser's written agreement to the transaction and to deliver a
disclosure statement respecting the penny stock rules.

The initial public offering price of the Common Stock will be sufficiently
high such that the Common Stock will not initially be a "penny stock".

However, there can be no assurance that, or when, the Company will be able
to demonstrate sufficiently that it has net tangible assets exceeding $2,000,000
or that the price of the Common Stock will remain above $5.00 per share prior to
the Company doing so, if at all. Therefore, since the Common Stock will not
initially be registered on a qualified national securities exchange or be
reported securities, there can be no assurance that the Common Stock will
qualify for exemption from the penny stock rules. If the Company's securities
become subject to the penny stock rules, the ability or willingness of
broker-dealers to sell or make a market in the Company's securities may be
adversely affected, the ability of purchasers in this offering to sell in the
secondary market any of the Securities acquired hereby may be adversely affected
and the market liquidity of the Company's securities could be adversely
affected.

LIMITS ON SECONDARY TRADING; POSSIBLE ILLIQUIDITY OF TRADING MARKET. The
Company anticipates that the Common Stock will be quoted on the OTC Electronic
Bulletin Board, which is a significantly less liquid market than the Nasdaq
SmallCap Market of other stock exchanges. If, at a future date, the Company
becomes able to satisfy the quantitative and other listing requirements for
listing of the Common Stock on the Nasdaq SmallCap Market or another stock
exchange, the Company may apply for such listing, although there can be no
assurance that the Company will apply for any such listing or that its
application would be accepted. As a result of the Common Stock being quoted on
the OTC Electronic Bulletin Board, an investor may find it more difficult to
dispose of, or to obtain accurate quotations as to the price of, the Common
Stock than if those securities were listed on the Nasdaq SmallCap Market or
another stock exchange.

Under the blue sky laws of most states, public sales of Common Stock after
this offering by persons other than the Company in "nonissuer transactions" must
either be qualified under applicable blue sky laws, or exempt from such
qualification requirements. Applicable exemptions for secondary trading of the
Common Stock may differ from state to state depending on the particular statutes
and regulations of that state. In many states, secondary trading will be
permitted only so long as information about the Company is published in a
recognized manual such as manuals published by Moody's Investor Service or
Standard & Poor's Corporation. The Company has applied for listing in a
recognized manual and will attempt to be so listed as soon after the closing of
this offering as reasonably practicable, but secondary trading in many states
will be restricted for some period of time after the date of this Prospectus.

PAYMENTS TO AFFILIATES

The Company plans to use approximately $25,000 from the proceeds of the
Offering to repay loans to Everette Hinson the Company's Vice President of
Finance. See "Use of Proceeds" and "Certain Transactions."

RISKS ASSOCIATED TO A LACK OF INDEPENDENT DIRECTORS

As of the date of this Prospectus, the Company has no independent directors.
The Company has identified two persons who have indicated their willingness to
serve as directors and the Company presently intends to undertake to appoint
such persons upon the completion of the Offering. The

18
<PAGE>
Company anticipates that such independent directors will serve on the Audit
Committee and the Compensation Committee. In the absence of independent
directors, however, none of the ongoing transactions, or past transactions which
are now closed, between the Company and its affiliates were approved by
independent directors and, until such independent directors are appointed, any
future transactions between the Company and its affiliates will continue to be
approved by directors who are also officers of the Company. See "Certain
Transactions."

CONTROL BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS

Upon completion of this Offering, Messrs. Berger and Dodrill will own 100%
of the outstanding Class B Common Stock which together with their shares of
Class A Common Stock and presently exercisable options represents approximately
45.8% of the outstanding Class A and Class B Common Stock of the Company,
assuming no exercise of options, warrants or the over-allotment option. Although
no voting arrangement exists among them, the Company's principal stockholders
and current management will, as a practical matter, be able to control the
outcome of most matters submitted for shareholder approval including the
election of directors and amendments to the Company's Certificate of
Incorporation and otherwise direct the affairs of the Company. See "Principal
and Selling Shareholders."

FUTURE SALES OF CLASS A COMMON STOCK PURSUANT TO RULE 144

The 3,634,028 shares of Class A and Class B Common Stock issued prior to
this Offering are "restricted securities" as that term is defined by Rule 144
under the Securities Act, and in the future, may be sold in compliance with Rule
144 or pursuant to an effective registration statement. Pursuant to Rule 144, a
person who has beneficially owned restricted securities for a period of one year
may, every three months, sell in brokerage transactions an amount that does not
exceed the greater of (i) 1% of the outstanding number of shares of a particular
class of such securities or (ii) the average weekly trading volume in such
securities on all national exchanges and/or reported through the automated
quotation system of a registered securities association during the four weeks
prior to the filing of a notice of sale by a securities holder. In the future,
sales of restricted stock pursuant to Rule 144 may have an adverse effect on the
market price of the Company's Class A Common Stock should a public trading
market develop for such shares.

Prior to this Offering, there has been no market for the Class A Common
Stock. The Company can make no prediction as to the effect, if any, that sales
of shares of Class A Common Stock, or the availability of such shares for sale,
will have on the market price of Class A Common Stock prevailing from time to
time. Nevertheless, sales of substantial amounts of Class A Common Stock in the
public market could adversely affect prevailing market prices.

SUBSTANTIAL SHARES OF CLASS A COMMON STOCK RESERVED FOR ISSUANCE PURSUANT TO
STOCK OPTION PLAN

The Company has reserved 1,150,000 and 800,000 shares of Class A Common
Stock for issuance to employees, officers, directors, and consultants pursuant
to option exercises under the Company's 1996 Incentive and Non-qualified Stock
Option Plan and the Company's 1998 Incentive and Non-qualified Stock Option
Plan, respectively. To date, the Company has granted options to purchase a total
of 781,309 shares of Class A Common Stock, at prices ranging from $0.225 to
$9.20 per share. The existence of these options may be perceived as an overhang
on the market and therefor may prove to be a hindrance to the Company's future
equity financing. Sales in the public market of substantial amounts of Class A
Common Stock, or the perception that such sales could occur, could depress
prevailing market prices for the Class A Common Stock. See "Management -- Stock
Option Plans," "Certain Transactions" and "Underwriting."

19
<PAGE>
POSSIBLE ISSUANCE OF PREFERRED STOCK

The Company's Certificate of Incorporation authorizes the issuance of up to
5,000,000 shares of preferred stock, $0.01 par value per share ("Preferred
Stock"), with designations, rights, and preferences determined from time to time
by its Board of Directors. Accordingly, the Company's Board of Directors is
empowered, without stockholder approval, to issue Preferred Stock with
dividends, liquidation, conversion, voting, or other rights that could adversely
affect the voting power or other rights of the holders of Class A Common Stock.
In the event of issuance, the Preferred Stock could be used, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. See "-- Representative's Influence Over Potential Future
Capital Financing" and "Description of Securities."

SUBSTANTIAL DILUTION; DISPROPORTIONATE CONSIDERATION PAID BY NEW SHAREHOLDERS

Based upon the net tangible book value of the Company at October 31, 1998,
investors in this Offering will suffer an immediate and substantial dilution of
their investment of approximately $6.23 or 107.4% in net tangible book value per
share. The cash consideration paid by new investors in this Offering is 21.65%
of the total consideration paid for the securities of the Company that will be
outstanding after this Offering. To the extent outstanding options or warrants
to purchase the Company's Class A Common Stock are exercised, there will be
further dilution. See "Dilution."

LACK OF PRIOR MARKET FOR THE CLASS A COMMON STOCK

Prior to this Offering, there has been no public trading market for the
Class A Common Stock and there can be no assurances that a public trading market
for the Class A Common Stock will develop or, if developed, will be sustained.
Although the Company intends to list the Class A Common Stock on The OTC
Bulletin Board, there can be no assurance that a regular trading market will
develop for the Class A Common Stock offered hereby, or, if developed, that it
will be maintained. If for any reason the Company fails to maintain sufficient
qualifications for continued listing on The OTC Bulletin Board or a public
trading market does not develop, purchasers of the Class A Common Stock may have
difficulty selling their Class A Common Stock should they desire to do so.

ARBITRARY DETERMINATION OF OFFERING PRICE

The initial public offering price of the Common Stock has been determined by
negotiations between the Company and the Representative and do not necessarily
bear any relationship to the Company's assets, net worth or results of
operations, or any other established criteria of value. The offering price set
forth on the cover page of this Prospectus should not be considered an
indication of the actual value of the Common Stock offered hereby. After
completion of this offering, such price may vary as a result of market
conditions and other factors. See "Description of Securities" and
"Underwriting."

REPRESENTATIVE'S WARRANTS

In connection with the Offering, the Company will sell to the
Representative, for nominal consideration, warrants to purchase an aggregate of
40,000 shares of Class A Common Stock. The Representative's Warrants will be
exercisable for a period of four years, commencing one year after the effective
date of the Registration Statement of which this Prospectus is a part, at an
exercise price of 165% of the initial public offering price of the Class A
Common Stock. The holder of the Representative's Warrants will have the
opportunity to profit from a rise in the market price of the Securities, if any,
without assuming the risk of ownership. The Company may find it more difficult
to raise additional equity capital if it should be needed for the business of
the Company while the Representative's Warrants are outstanding. At any time
when the holder thereof might be expected to exercise them, the Company would
probably be able to obtain additional capital on terms more favorable than those
provided by the Representative's Warrants.

20
<PAGE>
The Representative has demand and "piggyback" registration rights with
respect to the Class A Common Stock owned by the Representative, the
Representative's Warrants and the Class A Common Stock issuable upon exercise of
the Representative's Warrants. Any future exercise of these registration rights
may cause the Company to incur substantial expense and could impair the
Company's ability to raise capital through the public sale of its securities.
See "Dilution," "Shares Available for Future Sale" and "Underwriting."

NO DIVIDENDS ANTICIPATED

The Company has never paid any dividends. It expects that it will retain its
earnings, if any, for the foreseeable future to finance its operations and will
not pay dividends to investors.

LIMITED LIABILITY OF DIRECTORS

As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation eliminated personal liability of a director to the
Company and its stockholders for monetary damages for breach of fiduciary duty
as a director, except in certain circumstances. Accordingly, stockholders may
have limited rights to recover money damages against the Company's directors for
breach of fiduciary duty.

21
<PAGE>
USE OF PROCEEDS

The net proceeds (after deducting certain expenses which include a
prepayment of $75,000 in fees owed by the Company to the Underwriter in
connection with a two-year consulting agreement between them) to be received by
the Company from the sale of the shares of Class A Common Stock offered by the
Company hereby are estimated at approximately $1,578,200, based on an assumed
initial public offering price of $5.80 per share (approximately $1,886,180 if
the Underwriters' over-allotment option is exercised in full). The Company
expects such net proceeds (assuming no exercise of the Underwriters'
over-allotment option) to be utilized in approximately the manner set forth in
the following table:

<TABLE>
<CAPTION>
APPROXIMATE PERCENTAGE
APPROXIMATE OF
APPLICATION OF PROCEEDS DOLLAR AMOUNT NET PROCEEDS
- ------------------------------------------------------------------------ -------------- ------------------------
<S> <C> <C>
Repayment of existing debt (1).......................................... $ 500,000 31.7%
Advertising and Marketing (2)........................................... 500,000 31.7%
Purchase of Inventory (3)............................................... 200,000 12.7%
Working capital and general corporate purposes (4)...................... 378,200 24.0%
-------------- --------
Total............................................................... $ 1,578,200 100.0%
-------------- --------
-------------- --------
</TABLE>

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

(1) Of the $500,000 of Company debt to be repaid, $225,000 will be used to repay
$225,000 in bridge financing loaned at interest rates between 10% and 12%
per annum on or about January, 1999; $25,000 will be used to repay Everette
Hinson, a Company affiliate, which was loaned on or about August, 1998 at an
interest rate of 12.5%; the remainder will be used to negotiate settlements
of $625,000 of indebtedness consisting of $375,000 of bridge debts which
matured either on September 30, 1998 or October 15, 1998 and $250,000 of
debt that matures on April 9, 1999. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Certain Transactions."

(2) Of the $500,000 allocated for advertising and marketing, approximately
$350,000 will be used in the production of a Tegra driver infomercial and
related marketing materials; $100,000 will be used for the initial purchase
of media time; and $50,000 will be used on tour endorsements.

(3) The $200,000 for the purchase of inventory will be primarily spent on the
production of Tegra drivers.

(4) Includes payroll and benefits, rent, utilities, acquisition of inventory,
distribution costs, manufacturing costs, advertising costs, other overhead
expenses and prepaid expenses to underwriters.

If the Underwriters exercise the over-allotment option in full, the Company
will realize additional net proceeds of approximately $307,980, which will be
added to the Company's working capital.

The allocation of proceeds described in "Use of Proceeds" represents the
Company's best estimate of its allocation based upon the current state of its
business, operations and plans, current business conditions and the Company's
evaluation of its industry. Future events, including problems, delays, expenses
and complications which may be encountered, changes in economic or competitive
conditions and the result of the Company's sales and marketing activities may
make shifts in the allocation of funds necessarily desirable. Management of the
Company will have broad discretion in the application of substantially all of
such proceeds. See "Risk Factors."

The Company's financial requirements will depend upon, among other things,
the growth rate of the Company's business, the amount of cash flow generated by
operations and the company's ability to borrow funds to produce inventory or for
working capital purposes. Should the Company require additional debt or equity
financing to support its operations, there can be no assurance that such
additional financing will be available to the Company on commercially reasonable
terms, or at all.

Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short term
certificates of deposit, money market funds or other short-term interest bearing
investments.

The Company anticipates that the proceeds, if any, received from any
exercise of the Underwriters' Warrants will be utilized for working capital and
other corporate purposes.

22
<PAGE>
DILUTION

The difference between the initial public offering price per share of Class
A Common Stock and the pro forma net tangible book value per share of Class A
Common Stock after this Offering constitutes the dilution to investors in this
Offering. Net tangible book value per share is determined by dividing the net
tangible book value of the Company (total assets less intangible assets and
liabilities) by the total number of shares of Class A and Class B Common Stock
outstanding.

At October 31, 1998 the net tangible deficit of the Company was
($9,552,263), or approximately ($3.80) per share. After October 31, 1998, the
Company effected an exchange of an aggregate of $6,121,284 principal amount of
indebtedness plus accrued interest (of which $25,003 was accrued subsequent to
October 31, 1998 on a pro forma basis) for an aggregate of 1,224,257 shares of
Class A Common Stock and issued 18,000 shares of Class A Common Stock in
connection with $225,000 of indebtedness incurred after October 31, 1998, and
agreed to repurchase 125,000 shares of Class A Common Stock for $31,250 which
resulted in a decrease in net tangible deficit of $6,155,031 or $2.86 per share.
After giving effect to the sale by the Company of the 400,000 shares of Class A
Common Stock in this Offering (at an offering price of $5.80 per share) and the
Company's use of the estimated net proceeds therefrom as set forth under "Use of
Proceeds," the pro forma net tangible deficit of the Company at October 31, 1998
would have been ($1,744,032) or approximately ($0.43) per share. This represents
an immediate pro forma decrease in net tangible deficit of $0.50 per share to
the Company's present shareholders attributable to new investors and an
immediate pro forma dilution of $6.23 per share to the purchasers of shares of
Class A Common Stock in this Offering. The following table illustrates this per
share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price (per share of Class A Common Stock)
(1)............................................................... $ 5.80
Net tangible deficit per share at October 31, 1998.................. ($ 3.80)
Decrease in net tangible deficit attributable to exchange of
indebtedness and additional share issuance and repurchase of
shares............................................................ $ 2.86
Decrease in net tangible deficit attributable to shares offered
hereby............................................................ $ .50
---------
Pro forma net tangible deficit per share after the Offering......... ($ .43)
---------
Dilution of net tangible book value per share to purchasers in this
Offering (2)...................................................... ($ 6.23)
---------
---------
</TABLE>

- ------------------------
(1) Represents the assumed initial public offering price per share of Class A
Common Stock before deduction of the underwriting discount and estimated
expenses of the Offering.

(2) Assuming no exercise of the Underwriters' over-allotment option. See
"Description of Securities" and "Underwriting."

The following table sets forth on a pro forma basis as of October 31, 1998,
the number and percentage of shares of Class A and Class B Common Stock issued,
and the amount and percentage of consideration and average price per share paid
by existing shareholders of the Company, and to be paid by purchasers pursuant
to this Offering (based upon an initial public offering price of $5.80 per share
of Class A Common Stock and before deducting the underwriting discount and
estimated expenses of this Offering):

<TABLE>
<CAPTION>
OWNERSHIP
---------------------- CONSIDERATION
NUMBER ------------------------- AVERAGE PRICE
OF SHARES PERCENT AMOUNT PERCENT PER SHARE
---------- ---------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Existing Shareholders(3)....................... 3,634,028 90.08% $ 8,393,645 78.35% $ 2.31
New Shareholders............................... 400,000 9.92% $ 2,320,000 21.65% $ 5.80
---------- ---------- ------------- ----------
Total.................................... 4,034,028 100.00% $ 10,713,645 100.00% $ 2.66
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
</TABLE>

The foregoing table gives effect to the sale of the shares of Class A Common
Stock offered hereby and does not give effect to the exercise of the
Underwriters' over-allotment option, any Warrants or the Underwriters' Warrants.

- ------------------------
(3) Excludes 125,000 shares of Class A Common Stock originally issued to Argent
which the Company has agreed to reacquire for $31,250.

23
<PAGE>
CAPITALIZATION

The following table sets forth the cash and capitalization of the Company as
of October 31, 1998, the pro forma cash and capitalization of the Company as of
October 31, 1998 assuming the exchange of an aggregate of $6,121,284 principal
amount of indebtedness plus accrued interest (of which $25,003 was accrued
subsequent to October 31, 1998 on a pro forma basis) for an aggregate of
1,224,257 shares of Class A Common Stock and 1,224,257 Warrants and the issuance
of 18,000 shares of Class A Common Stock in connection with $225,000 of
indebtedness incurred after October 31, 1998 and the repurchase by the Company
of 125,000 Shares of Class A Common Stock for $31,250 and the pro forma cash and
capitalization as adjusted giving effect to the sale by the Company of the
400,000 shares of Class A Common Stock offered hereby. The table has not been
adjusted to give effect to the exercise of the Underwriter's over-allotment
option, or the exercise of the Underwriters' Warrants. This table should be read
in conjunction with the Financial Statements, including the notes thereto,
appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
OCTOBER 31,
OCTOBER 31, OCTOBER 31, 1998
1998 1998 ---------------
--------------- --------------- PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
--------------- --------------- ---------------
<S> <C> <C> <C>
Cash......................................................... $ 73 $ 193,823 $ 1,272,023
--------------- --------------- ---------------
--------------- --------------- ---------------
Advances from officers....................................... $ 299,147 $ 25,000 $ --
--------------- --------------- ---------------
Notes payable................................................ 6,124,648 844,648 369,648
--------------- --------------- ---------------
Shareholders' deficit:
Common Stock, Class A, par value $0.01 per share
(15,000,000 shares authorized, 1,101,818 issued,
1,051,818 outstanding; pro forma 2,344,075 issued and
2,169,075 outstanding; as adjusted 2,744,075 issued and
2,569,075 outstanding)................................... 11,018 23,441 27,441
Common Stock, Class B, par value $0.01 per share (5,000,000
shares authorized, 1,464,953 issued and outstanding)..... 14,650 14,650 14,650
Treasury Stock, 50,000 Class A shares at cost (175,000
shares on a pro forma basis)............................. (19,300) (50,550) (50,500)
Additional paid-in capital................................. 2,718,329 8,917,190 10,566,390
Accumulated deficit........................................ (12,276,960) (12,301,963) (12,301,963)
--------------- --------------- ---------------
Total shareholder's deficit............................ (9,552,263) (3,397,232) (1,744,032)
--------------- --------------- ---------------
Total capitalization................................... $ (3,128,468) $ (2,527,584) (1,374,384)
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>

DIVIDEND POLICY

The Company intends to retain any future earnings for the operation and
expansion of its business and does not anticipate paying any cash dividends in
the foreseeable future. Any future determination as to the payment of cash
dividends will depend upon a number of factors, including the Company's
earnings, capital requirements, financial condition and other factors considered
relevant by the Company's Board of Directors.

24
<PAGE>
SELECTED FINANCIAL DATA

The following selected financial data, insofar as it relates to the period
February 8, 1996 (inception) to January 31, 1998 and the year ended January 31,
1998, has been derived from the Company's financial statements, including the
balance sheets at January 31, 1997 and 1998 and the related statements of
operations, of changes in shareholders' deficit and of cash flows for the
periods then ended, and notes thereto appearing elsewhere herein. The data for
the nine months ended October 31, 1997 and 1998 has been derived from unaudited
financial statements also appearing herein and which, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the unaudited
interim periods. The selected financial data should be read in conjunction with
the "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's financial statements and notes thereto appearing
elsewhere herein. The results of operations for the nine months ended October
31, 1998 are not necessarily indicative of future results.

<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 8,
1996 FOR THE YEAR FOR THE NINE MONTHS ENDED
(INCEPTION) TO ENDED OCTOBER 31,
JANUARY 31, JANUARY 31, ----------------------------
1997 1998 1997 1998
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenue............................................ $ -- $ 741,120 $ 555,681 $ 479,463
Costs of sales..................................... -- 859,317 481,159 688,100
Research and development........................... 650,805 451,019 267,098 164,487
Stock-based compensation........................... 473,894 210,130 171,875 --
Selling, general and administrative expenses....... 1,251,009 3,669,657 2,333,055 4,749,687
Total costs and expenses........................... 2,375,708 5,190,123 3,253,187 5,602,274
Loss from operations............................... (2,375,708) (4,449,003) (2,697,506) (5,122,811)
Interest expense................................... (2,844) (244,648) (146,120) (495,943)
Gain on sale of license............................ -- -- -- 413,997
Net loss........................................... $ (2,378,552) $ (4,693,651) $ (2,843,626) $ (5,204,757)
Basic and diluted loss per share of Common Stock... $ (3.24) $ (2.21) $ (1.38) $ (2.10)
Weighted average number of common shares
outstanding (1).................................. 734,330 2,120,460 2,060,182 2,483,509
</TABLE>

<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1998
-------------------------------------
PRO AS
ACTUAL FORMA(2) ADJUSTED(2)(3)
---------- ---------- -------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Current assets...................................... $ 383,963 $ 577,713 $ 1,655,913
Working capital deficiency.......................... $(9,903,931) $(3,748,900) $(2,170,700)
Total assets........................................ $ 775,631 $ 969,381 $ 2,122,581
Total liabilities................................... $10,327,894 $4,366,613 $ 3,866,613
Stockholders' deficit............................... $(9,552,263) $(3,397,232) $(1,744,032)
</TABLE>

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

(1) Adjusted to give retroactive effect to a number of stock splits and reverse
stock splits as described in Note 6 to the Company's Financial Statements
included elsewhere in this Prospectus.

(2) Gives effect to the (i) exchange of an aggregate of $6,121,284 principal
amount of indebtedness plus accrued interest (of which $25,003 was accrued
subsequent to October 31, 1998 on a pro forma basis) for an aggregate of
1,224,257 shares of Class A Common Stock and 1,224,257 Warrants; (ii) an
aggregate of $225,000 of debt which was incurred by the Company between
October 31, 1998 and the date of this Prospectus; and (iii) the repurchase
by the Company of 125,000 shares of Class A

25
<PAGE>
Common Stock originally issued to Argent in April 1998 for $31,250. See
"Management's Discussion and Analysis of Financial Condition and results of
Operations--Liquidity and Capital Resources."

(3) Adjusted to (i) give effect to the sale of 400,000 shares of Class A Common
Stock offered hereby at an assumed initial public offering price of $5.80
per share and the application of the net proceeds therefrom and (ii) include
repayment of $500,000 of debt after offering. See "Use of Proceeds." No
effect has been given to the exercise of (i) the Underwriter over-allotment
option, (ii) the Representative's Warrants, or (iii) the Bridge Warrants.
See "Underwriting."

26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of the Company's financial condition as of and for
the fiscal year ended January 31, 1998 and for the period from February 8, 1996
(inception) through January 31, 1997 and for the Company's results of operations
for the nine month periods ended October 31, 1998 and 1997 should be read in
conjunction with the Company's financial statements and notes thereto included
elsewhere in this Prospectus.

RESULTS OF OPERATIONS

Sales during the year ended January 31, 1998 totaled $741,120. There were no
sales during the period February 8, 1996 (inception) to January 31, 1997. Of the
sales during the year ended January 31, 1998, $588,514 were generated by sales
of HiPPO products and $152,606 by sales of Tegra products.

Sales during the nine months ended October 31, 1998 totaled $479,463
compared to sales of $555,681 during the same period in 1997. Of the sales
during the nine months ended October 31, 1998, $22,395 were generated by sales
of HiPPO products and $457,068 by sales of Tegra products. The sales recognized
during the nine months ended October 31, 1997 represent HiPPO club and apparel
sales of $396,371 and $85,356, respectively.

The Company introduced the HiPPO line in July of 1997 and the Tegra line in
October of 1997. Sales during both the year ended January 31, 1998 and the nine
months ended October 31, 1998 were negatively impacted because the Company was
not able to purchase inventory to fill customer orders as a result of the
Company's inadequate working capital and lack of open terms with its vendors.
The Company believes that the absence of sufficient working capital has
historically prevented the Company from taking full advantage of demand for its
products. Likewise, the Company believes that the lack of open terms with its
vendors contributed to preventing the Company from meeting this demand.

In May of 1998 the Company sold its license to sell HiPPO products in the
U.S. back to Hippo Holdings, Ltd. along with all existing HiPPO inventory,
marketing materials and related liabilities. In return, the Company received a
cash payment from Hippo Holdings, Ltd. of approximately $413,000. In addition
Hippo Holdings, Ltd. returned to the Company 50,000 shares of the Company's
common stock and assumed commitments of the Company in excess of $1,000,000.
Accordingly, the Company has ceased selling HiPPO products and does not expect
to receive revenue on a going forward basis from such brand.

Costs of sales during the year ended January 31, 1998 totaled $859,317. Of
this amount, approximately $89,343 reflects costs associated with air freighting
goods from manufacturing facilities, which are in Asia, to the Company's
warehouse in Miami, Florida. Cost of sales during the nine months ended October
31, 1998 totaled $688,100. Of this amount, $48,307 reflects costs associated
with air freighting goods to the Company's warehouse in Miami, Florida. The cost
of air freight was necessitated by the Company's marginal working capital
position which limited the Company's ability to place orders as far in advance
as would otherwise be desirable or to maintain inventory to support demand. The
Company's shortage of working capital required the Company to attempt to shorten
lead times involved in production and shipping of goods in order to deliver
product as quickly as possible to its customers. Other incremental delivery
costs of $47,787 also adversely impacted cost of sales for the year ending
January 31, 1998. Additional production cost variances of $52,218 in material
and assembly charges attributed to smaller production runs and manufacturing
carrying charges than the Company expects would have been the case if it were in
a better working capital position also adversely impacted cost of sales for the
year ending January 31, 1998. Costs of sales in comparison to sales for the year
ended January 31, 1998 was negatively impacted by the liquidation of apparel for
$85,356 with a cost of $151,089. Cost of sales for the nine months ended October
31, 1998 were also negatively impacted by $142,157 loss for liquidation of
apparel below cost.

27
<PAGE>
Research and development costs totaled $451,019 for the year ended January
31, 1998 as compared to $650,805 for the period ended January 31, 1997. This 31%
decrease resulted from reduced spending associated with final development of
Tegra golf equipment.

Research and development costs totaled $164,487 for the nine months ended
October 31, 1998 as compared to $267,098 for the nine months ended October 31,
1997. This 38% decrease is attributed primarily to timing of research and
development expenditures.

During the year ended January 31, 1998 the Company incurred a royalty
expense of $16,681 to Hippo Holdings, Ltd. in connection with sales of HiPPO
products. Because all such sales have been terminated, the Company will no
longer have any royalty expenses to Hippo Holdings, Ltd.

Selling, general and administrative expenses totaled $3,669,657 for the year
ended January 31, 1998 as compared to $1,251,009 for the period ended January
31, 1997. This increase resulted primarily from increased advertising and
promotion spending and development costs and growth in employment and related
costs.

Selling, general and administrative expenses totaled $4,749,687 for the nine
months ended October 31, 1998 as compared to $2,333,055 for the nine months
ended October 31, 1997. This 104% increase resulted primarily from increased
payroll and related expenses, advertising and promotion, travel, professional
fees and facilities, supplies and services.

FORECAST

The Company expects to commence sales of Tegra products as existing and
potential retailers and consumers gain familiarity with the Tegra brand and the
benefits offered by the Company's Tegra Driver which will be advertised
extensively through the Company's 30 minute infomercial which the Company
anticipates airing April 1999. The Company plans to use $500,000 of the proceeds
from the Offering for marketing and advertising efforts. See "Use of Proceeds."

The Company anticipates that its cost of goods sold will decrease with
increased volume of purchasing and lower costs associated with shipping product
as the Company's working capital position improves.

The Company anticipates that within the 12 months subsequent to the closing
of the Offering it will hire an additional 5 people. Of these 5 people, 2 are
expected to be hired for sales positions. These individuals will primarily be
territory managers responsible for sales to specific accounts within a defined
geographic region. The remaining new hires will work in customer service and
administrative positions.

YEAR 2000 COMPLIANCE

Many existing computer systems and applications and other control devices
use only two digits to identify a year in the date field, without considering
the impact of the upcoming change in the century. As a result, as year 2000
approaches, computer systems and applications used by many companies may need to
be upgraded to comply with "Year 2000" requirements. The Company relies on its
systems in operating and monitoring many significant aspects of its business,
including financial systems (such as general ledger, accounts payable, accounts
receivable, inventory and order management), customer services, infrastructure
and network and telecommunications equipment. The Company also relies directly
and indirectly on the systems of external business enterprises such as
customers, suppliers, creditors, financial organizations and domestic and
international governments. The Company currently estimates that its costs
associated with Year 2000 compliance, including any costs associated with the
consequences of incomplete or untimely resolution of Year 2000 compliance
issues, will not have a material adverse effect on the Company's business,
financial condition or results of operations. However, the Company has not
exhaustively investigated and does not believe it has fully identified the
impact of Year 2000 compliance and has not concluded that it can resolve any
issues that may arise in complying with Year 2000 without disruption of its
business or without incurring significant expense. In addition, even if the
Company's internal systems are not materially affected by Year 2000 compliance
issues, the Company could be affected through disruption in the operation of the
enterprises with which the Company interacts.

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LIQUIDITY AND CAPITAL RESOURCES

The Company's primary source of liquidity has historically consisted of
sales of equity securities and high yield debt borrowings. During the year ended
January 31, 1998 the Company borrowed $1,925,500 from unaffiliated individuals
at interest rates ranging from 9.4% to 24% and with a weighted average rate of
13.4%. Additionally, the Company borrowed $937,871 (after accrued interest) from
individuals who either are officers of the Company or are affiliated with or
related to officers of the Company.

In November 1998, the Company executed exchange agreements (the "Exchange
Agreements") with certain unaffiliated noteholders whereby such note holders
exchanged an aggregate of $5,210,236 principal amount of indebtedness plus
accrued interest for 1,042,047 shares of Common Stock and 1,042,047 Warrants. At
January 31, 1999, $375,000 of such debt had not been converted and remains due
and owing. In addition $911,048 which the Company had borrowed from certain
officers or persons affiliated to officers of the Company was also converted in
November 1998 into 182,210 shares of Common Stock and 182,210 Warrants.

The Company is negotiating settlements of $625,000 of indebtedness
consisting of $375,000 of bridge debts which matured either on September 30,
1998 or October 15, 1998 debt and $250,000 of debt that matures on March 31,
1999. The Company has allocated $250,000 of the net proceeds of this Offering
for the purpose of settling this debt. The inability of the Company to
successfully negotiate a settlement of this debt may have a material adverse
impact on the Company.

The Company has developed and implemented strategies to meet ongoing and
future liquidity needs. These strategies include (i) obtaining funds from a
private placement of securities of the Company; (ii) an initial public offering
of the Company's Class A Common Stock and (iii) arranging for working capital
financing on inventory and receivables to assist in cash flow. In addition, the
Company is presently in discussions with Wisdom Industries Co., Ltd., the
Company's principal part supplier of driver heads, about exchanging up to $4
million in parts for $4 million in equity of the Company. Any equity transaction
would be valued at the market price for the Company's Common Stock at the date
of exchange. The management of the Company believes that these actions along
with a tighter control on overall costs will allow the Company to meet its
liquidity needs for the next 12 months. If one or more of the Company's
financing plans or strategies are not successful, it may materially impact the
Company's cash flow needs during the next twelve months.

Pursuant to the terms of a factoring agreement, the Company assigns
substantially all of its accounts receivable to a factor with recourse. The
Company is able to borrow up to 50% of eligible accounts receivable, as defined,
up to a maximum amount of $1 million. Advances from the factor incur interest at
24% per annum. Receivables assigned to the factor are subject to a charge of
3.0% of the face amount of the receivable. The advances from the factor are
secured by all the Company's assets. During the year ended January 31, 1998, the
Company incurred interest and factoring charges of $10,059 and $7,739,
respectively. The factoring agreement was for an initial term of six months and
renews for successive twelve month periods thereafter, unless cancelled by the
Company or the factor. At January 31, 1998, the Company had received advances of
approximately $115,000 in excess of those permitted under the factoring
agreement, resulting in the Company being in default of such agreement. As a
result of the default, the factor had the right to terminate the agreement and
demand payment of the funds advanced. Subsequent to year end, the Company has
reduced the amounts outstanding under the factoring agreement and is currently
within the borrowing base of such agreement.

SEASONALITY

The business of the Company is subject to seasonal fluctuations.
Historically, companies in the golf industry have seen their greatest sales in
the first half of the calendar year, and the business of the Company is
particularly dependent on sales during these months. Nevertheless, the Company
believes that, in the near term, its sales may not reflect this seasonality
because the opening of new accounts during the second half of 1998 will outweigh
seasonal effects, which the Company expects may increase its sales during this
period.

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BUSINESS

GENERAL

The Company is a designer and marketer of premium quality golf equipment,
apparel and accessories under the Tegra brand name. Tegra products represent a
wide range of technologically innovative, premium-priced men's golf clubs,
apparel and accessories that are sold in off-course golf specialty and on-course
pro shops. Tegra golf clubs incorporate the Company's patent-pending Invisible
Inset Hosel (the cylindrical chamber in which the shaft is attached to the club
head), a feature designed to increase the accuracy and distance of golf shots,
and were introduced into the US market in October 1997. The Company anticipates
that the majority of its revenue will be generated through sales of the Tegra
driver, which incorporates the Invisible Inset Hosel design. Company testing has
shown that the Tegra driver provides greater carry, roll and overall distance
than certain leading premium-priced drivers while simultaneously increasing
accuracy and reducing slice. Tegra products are now available in over 100 golf
shops nationwide and the Company expects that they will be in over 500 shops by
the Summer of 1999.

GOLF INDUSTRY OVERVIEW

According to the National Golf Foundation ("NGF"), there are approximately
48 million golfers worldwide, including approximately 25 million in the U.S. In
1997, golfers in the U.S. played an estimated 547 million rounds of golf and,
according to the National Sporting Goods Association, are estimated to have
spent $5.8 billion on golf equipment, apparel and accessories. Of the 25 million
U.S. golfers, about 5.2 million, characterized by the NGF as "avid golfers,"
play over 25 rounds of golf per year. The Company believes that avid golfers are
the first to seek out performance-oriented golf equipment and generally drive
golf club product trends.

According to the NFG in 1997, wholesale sales of golf equipment in the U.S.
were approximately $3.9 billion. In addition, wholesale sales of golf clubs
increased at an annual compound growth rate of approximately 10.9% over the
5-year period from 1992 to 1997. The Company believes that sales of golf clubs
will continue to grow in the future due to a number of factors including:

FAVORABLE POPULATION TRENDS. The Company believes that the aging of Baby
Boomers (those born between 1946 and 1964) and the emergence of the Baby
Boomers' children (those born between 1977 and 1995) are likely to increase the
demand for golf products generally. As golfers age, they tend to play golf more
often and spend more money on the sport, particularly in the over-50 age group.
Accordingly, because a majority of Baby Boomers are entering their 40s and 50s,
the Company expects interest in and spending on golf to increase. Further,
because Baby Boomers' children are beginning to enter their 20s, the age most
golfers begin to play the sport, the Company believes they will further increase
their participation in and spending on golf.

INCREASING AVAILABILITY OF GOLF FACILITIES. According to the NGF,
approximately 350 new golf courses will open in the U.S. annually between 1998
and the year 2000. The Company believes that these additional facilities will
make golf more accessible and convenient, leading to a further increase in golf
participation rates.

INCREASING INTEREST FROM NON-TRADITIONAL GOLFERS. The Company believes that
golf has become increasingly attractive to segments of the population that have
not historically been well-represented among golfers. Most notably, Tiger Woods
has made golf more appealing to junior and minority golfers. According to the
NGF, the total number of beginning and junior golfers increased by over 40% in
1997 compared to the previous year. In addition, the success of the Ladies
Professional Golf Association (the "LPGA") Tour and such female golfers as
Annika Sorenstam have increased the appeal of the sport to women.

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NEW PRODUCT INNOVATIONS. In recent years, the golf equipment industry has
made significant advances in product designs and technologies to enhance
golfers' performance and overall enjoyment of the game. The Company believes
that this rapid evolution of golf clubs accelerates the rate at which golfers
purchase new or additional clubs.

COMPANY HISTORY

The Company was founded as Hippo, Inc. in February 1996, with the goal of
becoming a leading U.S. golf equipment and apparel manufacturer. To that end the
Company entered into a licensing agreement with Hippo Holdings, Ltd, a leading
manufacturer of value-priced golf equipment in Europe, to manufacture, market
and distribute the HiPPO brand of golf equipment in the United States and
Canada. The Company began shipments of HiPPO products in July of 1997 and for
the ten month period ending April 30, 1998 sold approximately $500,000 in HiPPO
clubs. The Company has since discontinued the distribution of value-priced golf
equipment to pursue opportunities in the premium-priced end of the market
offered by Tegra products.

In June of 1996, the Company initiated a significant research and
development project to develop new, visibly distinct technology for its golf
clubs with which to enter the premium-priced segment of the U.S. golf market.
The premium-priced segment of the golf market captures the largest portion of
consumer spending with approximately 70% of consumer dollars being spent on
premium clubs. In addition, manufacturers margins on premium clubs are typically
significantly higher than on value-priced equipment. This research led to the
Company's development of its patent-pending Invisible Inset Hosel and bullet
shaped driver technology. These new technologies have become the key
technological elements of the Tegra brand of golf equipment. To improve its
margins and profits, the Company added the Tegra brand of premium golf equipment
and accessories at the premium-priced segment of the market.

In January, 1998 the Company changed its name to Outlook Sports Technology,
Inc. Management believes that this name better reflects the attitude and spirit
of the Company, as a forward thinking and technologically advanced sporting
goods manufacturer, than its prior name.

In April, 1998 the Company was approached by Hippo Holdings, Ltd. to
reacquire the rights to the HiPPO brand in the United States and Canada. On May
4, 1998 the Company sold its license to sell HiPPO-TM- products in the U.S. back
to Hippo Holdings, Ltd. along with all existing HiPPO-TM- inventory, marketing
materials and related liabilities. In return, the Company received a cash
payment from Hippo Holdings, Ltd. of approximately $413,000. In addition Hippo
Holdings, Ltd. returned to the Company 50,000 shares of the Company's common
stock and assumed outstanding liabilities and commitments of the Company in
excess of $1,000,000.

COMPANY PRODUCTS

TEGRA GOLF CLUBS. Tegra woods and irons with the Company's patent-pending
Invisible Inset Hosel are an evolution from current club technology. The Company
has worked with Chou Golf Design Labs, Inc. to develop the Tegra line of golf
clubs. The Company's design moves or insets the shaft as close to the center of
the club head as permitted under current USGA rules. As a result, the club head
will rotate to the target faster than conventional designs, making it easier to
square the club at impact and enabling the golfer to hit straighter and longer
shots. This technology has been designed to be visibly distinct to the consumer
at all times except while the club is being used. The Company's purpose in
making the technology "invisible" to golfers while hitting the shot is to
enhance the golfers ability to aim the club when addressing the ball. The
Company believes that the Company's Invisible Inset Hosel technology could be as
significant to the golf industry as perimeter weighting, graphite shafts or
oversize metal woods.

In addition, the Company designed the Tegra woods with a "bullet" shape in
which the widest part of the club is the club's face or hitting area. This
"bullet" shape contrasts with conventional club designs, in which the club head
widens out from the face of the club resulting in the widest part of the club
head being

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half an inch or more behind the face. The club's bullet shape provides a larger
hitting area and sweet spot than would be achieved in a club having the same
volume but a conventional design. An additional result of the bullet shape is
that more weight in the club is distributed directly behind the hitting area
than with conventional designs.

Tegra irons incorporate the same patent-pending Invisible Inset Hosel
technology as Tegra woods. The inset is as beneficial in Tegra irons as it is in
Tegra woods. The Company believes that squaring the club to the target at impact
makes Tegra iron shots more accurate than conventional designs. Tegra irons
feature an oversize head design, with weighting around the perimeter and behind
the sweet spot designed to maximize forgiveness on mis-hits and to provide a
better feel on center hits, and the Invisible Inset Hosel which has been
elevated to reduce club head twisting in longer grass.

The Company designs and markets Tegra men's right handed titanium woods and
17-4 stainless steel irons. The Company produces a full range of titanium
drivers (6 DEG., 8 DEG., 9 DEG., 10 DEG. and 11 DEG.) and titanium fairway woods
(#3, #5, #7 and #9) with graphite shafts and irons with options of steel or
graphite shafts. Each shaft is available in various flexes to accommodate
golfers of all ages and ability levels. The Company plans to introduce
left-handed, ladies and seniors woods in the Summer of 1999.

The Company has conducted player testing on its woods and irons and the
Company believes such testing shows its Tegra technology promotes straighter and
longer golf shots than other leading premium-priced golf clubs. "Iron Byron"
testing (robotic testing designed to repeat identical swings so different clubs
can be compared under controlled conditions) of Tegra woods has confirmed that
the Tegra driver provides greater carry, roll and overall distance than certain
leading premium-priced clubs while simultaneously increasing accuracy.
Additional mechanical testing which has recently been recorded using high speed
video shows that the Invisible Inset Hosel design produces a squarer club face
at impact than other leading premium-priced clubs, resulting in straighter and
longer shots.

The Company's Invisible Inset Hosel technology is visibly distinct to the
consumer except while the club is being used. In the golf industry, where many
products look alike, some technological features are difficult to distinguish.
Since many manufacturers make similar performance claims, consumers can become
confused and have difficulty distinguishing products. The visibility of the
technology is extremely important to identifying the product and communicating
its benefits in a believable way and therefore adds to the Company's marketing
effort. The Company believes that past performance of golf club sales shows that
golf clubs which have had visibly distinct technology have seen far greater
sales growth than equipment with new but non-visibly distinct technology. In
1967, Ping became a leader in the irons category when it introduced the first
cavity backed (perimeter weighted) irons, a technology that was visibly distinct
from other irons available at the time. In 1979, Taylor Made became a leader in
the driver category when it introduced the first "metal wood" with an investment
cast steel club head replacing the traditional persimmon wood head. In 1991,
Callaway Golf became a leader in the driver category when it introduced the
first oversized metal wood. Each of these products was not only an evolution of
existing technology but its technology was visibly distinct to the consumer. As
a more recent example, in 1994, Taylor Made introduced the Burner Bubble Shaft.
This shaft incorporates a geometrical "bubble" highlighted with copper paint to
emphasize its visible difference from conventional shafts. In the second quarter
of 1995, Taylor Made's sales nearly tripled from 1994, achieving a 30% share of
the premium driver market. The Company believes that a key factor to the success
of these products is that the technology was visibly distinct to the consumer.

The Company is currently sourcing all of its golf club components from
contract manufacturing facilities. The Company's golf club heads are currently
made in Asia by Wisdom Industries Co., Ltd., Fu Sheng Industrial Co., Ltd. and
Zhong Shan Wei Sheng Sporting Goods Co., Ltd. True Temper Sports ("True
Temper"), the world's largest shaft manufacturer, is currently producing the
Company's steel and graphite shafts domestically. Golf Pride, a division of the
Eaton Corporation, the world's largest grip manufacturer, produces the grips
domestically. Joe Powell Golf, Inc. ("Powell"), one of the golf industry's

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leading golf equipment assembly companies, assembles the Tegra clubs
domestically. The Company obtains these supplies by using individual purchase
orders, rather than detailed open supply agreements. The Company spent
approximately $451,019 in 1997 and $650,905 in 1996 in connection with research
and development.

APPAREL. In addition to golf clubs, the Company designs and markets a line
of men's apparel. The Company's apparel designs are intended to enhance the
Tegra brand image and be technically advanced. The Company's apparel collection
for the holiday 1999 selling season will focus on golf outerwear. The collection
will expand for the Spring 2000 to include a complete range of men's shirts.

Tegra outerwear is designed to perform in a variety of climatic conditions.
A collection of technical fabrics such as Air-Tech-TM-, a waterproof-breathable
nylon, and Micro Fleece, a brushed Polyester fabric which provides breathable
insulation have been incorporated to help keep the golfer comfortable when
playing in inclement weather.

A complete range of men's shirts will be introduced for the Spring 2000
selling season. The Company's men's shirt collection will focus on offering a
limited range of updated styles in a wide variety of colors. The Tegra
collection will emphasize performance, comfort and style and are suitable for
wear on or off course. The Company will offer a custom embroidery program for
on-course golf shops and anticipates that 75% of all shirts will be custom
logoed.

ACCESSORIES. The Company offers a variety of golf caps and full size staff
bags. The Company plans to offer a full line of accessories, including bags,
umbrellas, towels and caps. The Company anticipates offering a range of golf
bags, including stand, light-weight carry and full size staff bags. The Company
expects its golf bags, umbrellas, and towels to be available for the summer,
1999. See "Risk Factors -- Dependence on Product Introduction."

MARKETING

GENERAL. The Company's target consumer is the avid amateur golfer. To reach
this consumer the Company is developing a direct response advertising campaign,
which will include a thirty minute infomercial, creating a unique web site which
will include electronic commerce, designing and installing TREs in golf shops
and attempting to obtain endorsements from golf professionals.

DIRECT RESPONSE ADVERTISING. The Company is presently developing a direct
response advertising campaign. The campaign will contain a long format
(30-minute) infomercial for Tegra drivers as well as 30 second, one minute and
two minute spots. The Company believes that several golf equipment companies
have found long format infomercials to be extremely successful and profitable..
The Company believes that the unique technological features incorporated in the
Tegra driver and visibility of the features give it the potential to be a
successful direct response product. Consumers will be able to purchase Tegra
products directly by calling the Company's toll free phone number or ordering
the product on-line. The Company plans to test market the infomercial on the
Golf Channel and other cable sports channels beginning in May, 1999.

In addition to broadcast advertising, the Company will launch a direct
market print campaign. The Company plans to place Tegra driver direct response
print advertisements in national golf publications such as GOLF DIGEST, GOLF
WEEK and GOLF MAGAZINE and other targeted consumer publications.

INTERNET. The Company anticipates that it will have a web site on the
internet by May 1999. The site will contain information about Tegra products and
tour players. In addition, the Company is considering making products available
for direct internet purchases (electronic commerce), although no assurance can
be given as to when, or if, the Company will do so. The Company foresees
expanding on-line operations to maximize internet opportunities.

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TEGRA RETAIL ENVIRONMENTS. The Company has adopted a marketing model used
by marketers of many leading brands of consumer products who use in-store shops
to increase sales and brand awareness. TREs are advanced retail selling systems
designed to increase sales and brand awareness at point of purchase by selling
Tegra products in a branded environment. TREs are defined spaces in golf shops,
which occupy from 25 to 150 square feet and consist of a variety of elements,
which may include flooring, fixtures, graphics, and point-of-purchase materials.
Within a TRE the Company has the ability to market Tegra golf clubs, apparel and
accessories in an integrated, branded environment designed to convey the image
of the Company as innovative in golf club technology and distinctive in design.

In the Spring, 1998, the Company began a rollout of Tegra Retail
Environments in select golf stores. The Company installed 58 TREs in golf stores
in 55 cities, including two of the nation's largest golf equipment retailers
Edwin Watts and Roger Dunn Golf Shops. This rollout demonstrated to the Company
that there is a need and an opportunity in the marketplace for in-store golf
shops. However, due to cash flow problems in 1998, the Company was unable to
support these shops and accordingly removed installations for revision and
reinstallation in 1999. Most present Tegra retailers have indicated a desire to
have updated TREs and the Company anticipates that the majority of golf shops
which retail Tegra products in the year 2000 will be included in the TRE
program.

TOUR ENDORSEMENTS. Tegra products were endorsed for the 1998 season by four
touring professionals. Tegra players won more than $2 million world-wide on
tour. The company is revising its tour strategy in 1999 to focus on a large
number of PGA Tour professionals to endorse its products rather than signing
large endorsement contracts with one or two players. The Company has formed a
unique tour program which will begin March 28, 1999. Under the program PGA
professionals will be compensated for wearing Tegra clothing and/or headgear
and/or using a Tegra driver. The Company anticipates that between 15-30
professional golfers will endorse Tegra products in 1999, although no assurance
can be given that the Company will obtain such endorsements.

RETAIL PRICING. One of the Company's sales strategies is to deliver
products which can achieve superior retail margin in order to incentivize
retailers to sell more Tegra product. The Company estimates that retailers on
average achieve 20% gross margin on sales from premium golf equipment. By
pricing appropriately, the Company believes it will be able to offer retailers
products that can achieve superior margin. The Company expects that, on average,
Tegra golf clubs will allow retailers to achieve 40% gross margin, while Tegra
apparel allow retailers to achieve in excess of 50% gross margin.

CATALOGUE SALES. Tegra products are available in the Edwin Watts golf
catalog, one of the country's leading golf catalogues.

PATENTS

Where appropriate, the Company seeks patent protection. The Company has
filed patent applications covering various aspects of its TEGRA line of inset
woods and irons. The Company filed a United States provisional patent
application on December 31, 1996, entitled INSET HOSEL GOLF CLUB. The Company
subsequently filed a full United States patent application and a Patent
Cooperation Treaty patent application based on the United States provisional
patent application, claiming priority as of the December 31, 1996 date. The
Patent Cooperation Treaty Application designated all states. Based on the
results of a patent search obtained by outside patent counsel, the Company is of
the view that various aspects of the TEGRA line of woods and irons may be
patentable. The patent applications include sixty-eight claims of varying scope
and construction, including claims directed to golf clubs having an inset hosel
wherein the fact that the hosel is inset and is hidden from the golfer, as well
as claims directed to methods of making such a golf club. Other claims are
directed to other features or combinations of features of the Tegra golf clubs.
The Company has not received a substantive office action on the merits from the
United States Patent and Trademark Office.

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The Company intends to seek further patents on its technology, if
appropriate. However, there can be no assurance that patents will issue from any
of the Company's pending or any future applications or that any claimed allowed
from such applications will be of sufficient scope of strength, or be issued in
all countries where the Company's products can be sold, to provide meaningful
protection or any commercial advantage to the Company. See "Risk
Factors--Intellectual Property."

COMPETITION

The Company competes with a number of established golf club manufacturers,
many of which have greater financial and other resources than the Company. The
Company's competitors include Callaway Golf Company, Adidas-Salomon AG (Taylor
Made) and Fortune Brands, Inc. (Titleist and Cobra). The Company competes
primarily on the basis of performance, brand name recognition, quality and
price. The Company believes that its ability to establish its brand and market
its products through its distributors is important to its ability to compete.
See "Risk Factors -- Competition."

The golf club industry is generally characterized by rapid and widespread
imitation of popular technologies, designs and product concepts. The Company
expects that one or more competitors may introduce products similar to its Tegra
clubs. The buying decisions of many purchasers of golf clubs are often the
result of highly subjective preferences which can be influenced by many factors,
including, among others, advertising media, promotions and product endorsements.
The Company may face competition from manufacturers introducing other new or
innovative products or successfully promoting golf clubs that achieve market
acceptance. The failure to compete successfully in the future could result in a
material deterioration of customer loyalty and could have a material adverse
effect on the Company's business, operating results or financial condition. See
"Risk Factors -- Competition."

In addition, the Company competes with a number of more well-established
designers of golf apparel, including Nike, Reebok, Greg Norman, and Tommy
Hilfiger. Because the Company competes primarily on the basis of brand name
recognition, quality, comfort, and fashion considerations, the Company believes
that its ability to establish its brand and market its apparel is important to
its ability to compete. The subjective nature of apparel-buying decisions could
result in a lack of acceptance in the market of the Company's apparel and
accessories. Failure of the Company's current and planned apparel and
accessories would adversely affect the Company's future growth and
profitability. See "Risk Factors -- Competition."

PROPERTIES

The Company's corporate headquarters are located in a 2,250 square foot
facility in New York, NY. This facility accommodates the Company's corporate,
administrative, marketing and sales personnel. The lease on this facility is
month to month.

EMPLOYEES

At February 9, 1999, the Company had 8 full-time employees, all of which
were involved in executive, managerial, supervisory and sales capacities. None
of the Company's employees is covered by a collective bargaining agreement or is
a member of a union.

The Company has had discussions with its current and former employees which
it has not paid in an attempt to formulate a repayment plan, which discussions
have included a proposal by the Company to pay such persons an amount in excess
of the sums due to such persons, which additional amount may be paid to such
persons in the form of equity. The Company anticipates that the additional
equity payment will not exceed an aggregate value of $300,000.

LEGAL PROCEEDINGS

The Company has received a letter from Tatsuya Saito requesting that the
Company review its Tegra line of clubs in view of a patent issued to him on July
12, 1994 (the "Saito Patent"). The Saito Patent covers certain aspects of a club
head and hosel, including the positioning of the hosel inset relative to the
club head. The Company has referred this request to independent outside patent
counsel. The Company does

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not believe that the Tegra line of clubs infringes any of the claims of the
Saito Patent; however, there can be no assurance that a court will find that one
or more of the Company's products does not infringe the Saito Patent, or any
other patent. If Tatsuya Saito is successful in asserting its patent, it could
require the Company to alter or withdraw existing products, delay or prevent the
introduction of new products, or force the Company to pay damages if the
products have been introduced. See "Risk Factors -- Litigation."

The Company is a defendant in a lawsuit filed by Vardon Golf Company, Inc.
("Vardon") asserting that the Company's Tegra woods and irons infringe one of
the claims of its patent issued on April 12, 1994 (the "Vardon Patent"). The
Vardon Patent includes claims directed to a number of aspects of a golf club
head and hosel, including claims directed to an extended radius of gyration,
which includes an aspect of the club head extending behind the hosel. Vardon
filed a complaint in the Northern District of Illinois, Eastern Division, on May
13, 1998, in which Vardon alleges that six golf club manufacturers, including
the Company, have manufactured, sold, offered to sell and distributed in the
United States, specifically in the Northern District of Illinois, wood-type and
iron golf clubs that are covered by at least one claim of the Vardon Patent and
a related design patent. The Company does not believe that the Tegra line of
clubs infringes any of the claims of these patents and the Company is in the
process of preparing a response to the complaint; however, there can be no
assurance that a court will find that the Company does not infringe one or the
other of these patents, or both. If Vardon is successful in asserting its
patent, it could require the Company to alter or withdraw existing products,
delay or prevent the introduction of new products, or force the Company to pay
damages if the products have been introduced. See "Risk Factors -- Litigation."

The Company was the defendant in a lawsuit filed by TBWA Chiat/Day Inc.
("Chiat") in the Supreme Court of the State of New York on July 6, 1998 alleging
breach of contract for advertising services and that certain fees and expenses
in an amount of approximately $200,000 incurred by Chiat have not been paid by
the Company. The Company and Chiat have reached a settlement agreement in this
lawsuit pursuant to which the Company has agreed to pay Chiat $155,000. The
Company is currently in default of such settlement payment. See "Risk Factors --
Litigation."

The Company has been named as a defendant, together with May Davis Group
("May Davis"), in a litigation brought in the United States District Court,
Southern District of New York on December 11, 1998 (Case Number 98CIV. 8772)
brought by Argent Securities, Inc. ("Argent"). Argent alleges that the Company
has breached a letter of intent with Argent whereby Argent was to act as the
underwriter of the company's initial public offering of securities as well as a
Private Placement Agreement whereby Argent was to act as the placement agent of
the Company's private placement of securities. The complaint alleges that Argent
is owed $20,557 by the Company for expenses and $1.5 million by the Company for
services performed by Argent for the benefit of the Company. The complaint
further alleges that May Davis was instrumental in interfering with these
contracts and Argent is seeking $1.5 million in damages from May Davis as
damages caused by such alleged tortious interference. Finally Argent is claiming
$1.5 million in damages against both of the Company and May Davis, jointly and
severally, which is to equal lost revenues and future profits of Argent. The
Company believes these claims are without merit and intends to vigorously defend
itself against these claims. The Company is also considering bringing counter
claims against Argent. There can be no assurance however, that the Company will
be successful in defending itself against these claims and if the Company were
to lose such litigation it would have a materially adverse effect on the Company
and its ability to continue operations.

36
<PAGE>
an agreement regarding the value of the services rendered by Mr. Woosnam, Mr.
Woosnam may decide to pursue legal action against the Company. In the event that
Mr. Woosnam does file a lawsuit against the Company, the Company will assert its
defenses vigorously; however, no assurance can be made that the Company will
prevail or as to the damages which a court may assess against the Company if Mr.
Woosnam were to prevail in any such action.

From time to time the Company has been threatened with, or named as a
defendant in, lawsuits in the ordinary course of its business. The Company's
management does not believe that any of these lawsuits are material. There can
be no assurance that one or more future lawsuits, if decided adversely to the
Company, would not have a material adverse effect on the Company's business,
financial condition and results of operations.

37
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names, ages and positions with the
Company as of the date of this Prospectus of all of the officers and directors
of the Company. Also set forth below is information as to the principal
occupation and background for each person in the table.

<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICE
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Paul H. Berger....................................... 30 Chairman of the Board and Chief Executive Officer
Jim G. Dodrill II.................................... 32 President, General Counsel and Director
Everette C. Hinson................................... 49 Vice President Finance
Neal J. Cohen........................................ 41 Vice President Apparel Operations
David K. Stern....................................... 34 Vice President Marketing
</TABLE>

MR. BERGER co-founded the Company with Mr. Dodrill and has served as the
Chairman of the Board and Chief Executive Officer of the Company since the
Company's inception. From 1994 to 1995, Mr. Berger was the Special Projects
Manager for Designs, Inc. ("Designs"), of which his father is the Chairman of
the Board. Mr. Berger assisted in repositioning Designs from a single brand
apparel chain to a multi-brand operation and in the acquisition by Designs of
Boston Trading Ltd., a high quality men's and women's apparel manufacturer. From
1993 to 1994, Mr. Berger served as an attorney with Designs. Mr. Berger is a
graduate of the George Washington University and the University of Miami School
of Law. Mr. Berger is licensed to practice law in the Commonwealth of
Massachusetts and the State of Florida.

MR. DODRILL co-founded the Company with Mr. Berger and has served as
President, General Counsel and a director of the Company since the Company's
inception. From 1993 to 1996, Mr. Dodrill was an associate at the law firm of
Latham & Watkins, practicing in the corporate area with an emphasis on
securities offerings, acquisitions, finance and general corporate
representation. From 1988 to 1990, Mr. Dodrill worked for Davis Polk & Wardwell
conducting research and coordinating administrative efforts regarding corporate
reorganization and recapitalization transactions and mergers and acquisitions.
Mr. Dodrill graduated from Brown University and the University of Miami School
of Law, MAGNA CUM LAUDE. Mr. Dodrill is licensed to practice law in the State of
New York.

MR. HINSON has served as the Company's Vice President of Finance since May,
1997. From 1987 to 1997, Mr. Hinson served as Controller and Vice President of
Finance, responsible for the accounting, treasury, credit, MIS and human
resources departments, at Dunlop Maxfli Sports Corporation, a multi-division
sporting goods manufacturer with annual sales in excess of $125 million. From
1980 to 1987, Mr. Hinson served as Corporate Controller and in various
controllership and operations positions at Elscint, Inc., a manufacturer and
distributor of medical diagnostic equipment with annual sales in excess of $100
million.

MR. COHEN has served as the Company's Vice President of Apparel Operations
since June 1996. From 1989 to 1996, Mr. Cohen was Vice President of Operations
for Benetton Sportsystem Active, where he was responsible for managing the
global sourcing of all brands, implementing final quality assurance auditing
procedures and managing customer service, and traffic, warehousing and
distribution of product. From 1980 to 1985 Mr. Cohen served as the
Quality/Production Manager for Adidas U.S.A.

MR. STERN has served as the Company's Vice President of Marketing since
March, 1998. From 1997 to February, 1998, Mr. Stern served on the Company's
Advisory Board. From 1997 to 1998, Mr. Stern served as Director of Marketing for
Thermolase, a publicly traded company which owns and runs spa facilities across
the U.S. From 1987 to 1997, Mr. Stern was Vice President of Marketing at
Maddocks and Company.

The Company currently has two directors, Mr. Paul Berger and Mr. Jim
Dodrill. The Company's Board of Directors is divided into three classes, with
one class of directors elected each year at the annual

38
<PAGE>
meeting of stockholders for a three-year term of office. All directors of one
class hold their positions until the annual meeting of stockholders at which the
terms of directors in such class expire and until their respective successors
are elected and qualified. Mr. Jim Dodrill serves in the class whose term
expires in 1999; Mr. Paul Berger serves in the class whose term expires in 2000.
The Company intends to appoint one of the individuals named below under the
caption "New Directors" to serve in the class whose term expires in the year
2000 and the Company intends to appoint one of the individuals under the caption
"New Directors" to serve in the class whose term expires in the year 2001.
Executive officers of the Company are elected annually by the Board of Directors
and serve at the discretion of the Board of Directors or until their successors
are duly elected and qualified.

None of the Company's executive officers has entered into an employment
agreement with the Company. See "Risk Factors -- Lack of Experience of
Management."

NEW DIRECTORS

Set forth below are the names, ages and certain background information of
the two individuals the Company intends to appoint to as independent members to
its Board of Directors, each of whom has agreed to serve. The Company
anticipates that the new directors will also serve on the Audit Committee and
the Compensation Committee.

MR. HASKELL has agreed to serve on the Company's Board of Directors. Mr. Kim
C. Haskell has over twenty-one years of media and marketing experience,
including currently serving as Executive Vice President of Colby, Effler &
Partners.

MR. SNIDER has agreed to serve on the Company's Board of Directors. Mr.
Michael Daniel Snider has been a professional golfer for twenty-five years and
is currently the Head Golf Professional at Chenal Country Club. Mr. Snider's
students include PGA, LPGA and Nike Tour players as well as amateur golfers of
all skill levels.

COMPENSATION OF DIRECTORS

The Company's directors will be reimbursed for any out-of-pocket expenses
incurred by them for attendance at meetings of the Board of Directors or
committees thereof. The Board of Directors intends to establish and form a
Compensation Committee and Audit Committee upon completion of this Offering. The
Board of Directors also intends to compensate Directors who are not employees of
the Company $1,000 per month and to grant each Director who is not an employee
of the Company options to purchase 12,000 shares of Common Stock each year, with
a per share exercise price equal to the then fair market value of the Common
Stock.

ADVISORY BOARD

Since the Company's formation, it has operated under the guidance of a
Senior Advisory Board. The Senior Advisory Board serves as a resource for
management and has no power or authority to direct the affairs of the Company.
The following are members of that Board:

STANLEY BERGER. Mr. Berger is Chairman of the Board of Directors of
Designs, Inc., based in Needham, Massachusetts. Mr. Berger co-founded Designs in
1977. Under his leadership, the company has grown to be one of the largest
global retailers of Levi Strauss & Co. products. Mr. Berger is the father of
Paul Berger.

STEVEN FIREMAN. Mr. Fireman served in the senior management of Reebok, Inc.
for five years, including his last two years serving as President of Reebok's
Casual Division (which included Reebok's Golf Division). At Reebok, Mr. Fireman
launched the Greg Norman apparel line and Reebok's line of golf footwear.

39
<PAGE>
RIC JARRETT. Mr. Jarrett has twenty years of experience in the golf
industry. As the former owner, President and Chief Executive Officer of Tiger
Shark Golf, Inc., a multi-national golf equipment manufacturer, Mr. Jarrett has
extensive experience in areas ranging from product design to creation of
marketing and sales strategies. Mr. Jarrett is currently the President and Chief
Executive Officer of Absolute Sports, Inc.

DOUG RUDISCH. Mr. Rudisch is with Brookside Capital, a limited partnership
formed by Bain Capital, Inc. to make strategic equity investments in public
companies. Prior to joining Brookside, Mr. Rudisch was an associate at Bain
Capital, where he was responsible for structuring, analyzing and executing
private equity transactions and management buy outs. Prior to joining Bain
Capital, Mr. Rudisch worked with the Boston Consulting Group, a strategic
consulting firm. Mr. Rudisch graduated MAGNA CUM LAUDE from the Wharton School
of Business.

WILLIAM TAYLOR. Mr. Taylor was Vice President of Customer Relations at Levi
Strauss & Co. Mr. Taylor was an executive at Levi Strauss for more than 20
years. Before joining Levi Strauss, Mr. Taylor was an Assistant Coach of the
Dallas Cowboys.

40
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth all compensation received by the Company's
Chief Executive Officer and each other executive officer whose total annual
salary and bonus exceeded $100,000 during the fiscal year ended January 31, 1998
(collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE
(FISCAL YEAR 1998)

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
SECURITIES
----------------------- OTHER ANNUAL UNDERLYING OPTIONS
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION (1) (2)
- ---------------------------------------------------- ---------- ----------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Paul H. Berger...................................... $ 32,721 -- $ 7,800 -- (3)
Chairman of the Board and Chief
Executive Officer
James G. Dodrill II................................. 32,721 -- 7,800 (4)
President, General Counsel and Director
Gary M. Treater..................................... 153,912 -- 6,039 13,000
Executive Vice President
Neal J. Cohen....................................... 135,600 -- 6,444 10,000
Vice President Apparel Operations
Everette C. Hinson.................................. 77,263 -- -- 18,333
Vice President Finance
James J. Henley..................................... 120,000 -- 5,400 7,000
Apparel Design Director
</TABLE>

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

(1) Other Annual Compensation consists of life insurance premiums paid by the
Company on behalf of the Named Executive Officer. See "-- Benefit Plans --
MONY Plan."

(2) See "Option Grants in Last Fiscal Year," below.

(3) Mr. Berger deferred an additional $92,279 in compensation.

(4) In March, 1998, Mr. Dodrill received options to purchase 166,666 shares of
Class A Common Stock at $3.00 per share in lieu of $92,279 of salary for
1997.

BENEFIT PLANS

STOCK OPTION PLANS. The 1996 Incentive and Non-Qualified Stock Option Plan
(the "1996 Plan") was adopted by the Board of Directors and the shareholders.
Under the 1996 Plan, 1,150,000 shares of Class A Common Stock have been reserved
for issuance upon exercise of options designated as either (i) incentive stock
options ("ISOs") under the Internal Revenue Code (the "Code"), or (ii)
non-qualified options. ISOs may be granted under the 1996 Plan to employees and
officers of the Company. Non-qualified options may be granted to consultants,
directors and other persons who render services to the Company or any subsidiary
corporation of the Company (whether or not they are employees).

The 1998 Incentive and Non-Qualified Stock Option Plan (the "1998 Plan" and
collectively with the 1996 Plan, the "Plans") was adopted by the Board of
Directors and the shareholders of the Company in June, 1998. Under the 1998
Plan, 800,000 shares of Class A Common Stock have been reserved for issuance
upon exercise of options designated as either (i) incentive stock options
("ISOs") under the Internal Revenue Code (the "Code"), or (ii) non-qualified
options. ISOs may be granted under the 1998 Plan to employees and officers of
the Company. Non-qualified options may be granted to consultants and other
persons who render services to the Company or any subsidiary corporation of the
Company (whether or not they are employees), and to all directors of the
Company.

The purpose of the Plans is to provide additional incentive to officers and
other employees of the Company as well as other persons providing services to
the Company by affording them an opportunity to acquire or increase their
proprietary interest in the Company through the acquisition of shares of its
Common Stock. The Board of Directors is responsible for administering the Plans.
The 1998 Plan may also be administered by a committee consisting of at least two
disinterested directors. The Board, within the

41
<PAGE>
limitations of the Plans, may determine the persons to whom options will be
granted, the number of shares to be covered by each option, whether the options
granted are intended to be ISOs, the duration and rate of exercise of each
option, the option purchase price per share and the manner of exercise, the
time, manner and form of payment upon exercise of an option, and whether
restrictions such as repurchase rights by the Company are to be imposed on
shares subject to options. ISOs granted under the Plans may not be granted at a
price less than the fair market value of the Class A Common Stock on the date of
grant (or 110% of fair market value in the case of persons holding 10% or more
of the voting power of all classes of stock of the Company). The aggregate fair
market value at the time of grant of shares for which ISOs granted to any person
are exercisable for the first time by any person during any calendar year may
not exceed $100,000. Options under the Plans may not be granted more than 10
years after its effective date. Options granted to date have seven (7) year
terms. The term of each ISO granted under the Plans will expire not more than
ten years from the date of grant (or five (5) years in the case of persons
holding 10% or more of the voting power of all classes of stock of the Company).
Options granted under the Plans are not transferable during an optionee's
lifetime but are transferable at death by will or under the laws of descent and
distribution. In addition to the options summarized below, a total of ISOs and
non-qualified options to purchase 326,819 shares of Class A Common Stock have
been granted to other employees and advisors of the Company.

The following table sets forth as to each Named Executive Officer (a) the
total number of shares subject to options granted during the fiscal year ended
January 31, 1998, (b) exercise price of such options, (c) the percentage such
grants represent of the total option grants to employees in the fiscal year
ended January 31, 1998, and (d) the expiration date of such option grants.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES SUBJECT TOTAL OPTIONS
TO EXERCISE GRANTED TO
NAME OPTION GRANTS PRICE EMPLOYEES EXPIRATION DATE
- ----------------------------------------- ---------------- ------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Gary Treater............................. 4,000 $ 6.00 .8% December 31, 2004
9,000 $ 6.00 1.8 January 30, 2005
Everette Hinson.......................... 8,333 $ 0.75 1.7 May 5, 2004
3,000 $ 6.00 .6 December 31, 2004
7,000 $ 6.00 1.4 January 30, 2005
Neal Cohen............................... 3,000 $ 6.00 .6 December 31, 2004
7,000 $ 6.00 1.4 January 30, 2005
James Henley............................. 5,000 $ 6.00 1.0 December 31, 2004
2,000 $ 6.00 .4 January 30, 2005
</TABLE>

The following table sets forth certain information concerning the value of
unexercised stock options held by the Named Executive officers.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT JANUARY 31, OPTIONS AT JANUARY 31,
1998 1998
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gary Treater........................................... 11,554 28,334 $ 44,578 $ 116,579
Everette Hinson........................................ 3,000 15,333 $ 3,000 $ 59,081
Neal Cohen............................................. 6,193 14,917 $ 20,804 $ 53,343
James Henley........................................... 6,526 4,917 $ 12,336 $ 16,943
</TABLE>

MONY PLAN. The MONY Plan is a flexible premium variable life insurance
policy that the Company has provided as a benefit since August 15, 1996 to the
following employees: Paul Berger, Jim Dodrill, Gary Treater, Neal Cohen and
James Henley. In addition, the Company has provided this benefit to Everette
Hinson since July 1, 1998. Pursuant to the MONY Plan, an individual (or his
successors) may, subject to certain conditions, receive up to $500,000 at his
death. In the alternative, the individual may choose to receive a lesser payment
after a certain number of years in service, the amount of such payment to vary
with length of service, among other factors. The Company pays monthly premiums
ranging from $450 to $650 for the MONY Plan. The Company has the discretion to
increase the benefit amounts provided to MONY Plan beneficiaries and to
terminate the MONY Plan at will.

42
<PAGE>
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock immediately prior to this
Offering, and as adjusted to reflect the sale of the shares of Class A Common
Stock offered by the Company by (i) each person known by the Company to
beneficially own more than five percent of the Common Stock, (ii) each director
and the Company's Chief Executive Officer, (iii) all directors and executive
officers of the Company as a group and (iv) each Selling Stockholder. Except as
otherwise indicated, the address of each beneficial owner of five percent of
such Common Stock is the same as the Company. See "Management."

<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP
BENEFICIAL OWNERSHIP IMMEDIATELY AFTER
PRIOR TO OFFERING OFFERING (1)
NAME AND ADDRESS OF ---------------------- -------------------
BENEFICIAL OWNER 5% STOCKHOLDER OR SELLING STOCKHOLDER NUMBER PERCENT PERCENT
- -------------------------------------------------------------------- ---------- ---------- -------------------
<S> <C> <C> <C>
Paul Berger (2)..................................................... 1,488,823 39.42% 35.64%
Jim Dodrill (3)..................................................... 544,812 14.42% 13.04%
Synergy Group International, Inc. (4)............................... 200,000 5.30% 4.79%
4725 East Sunrise Drive, Suite 228
Tucson, AZ 85718
All directors and executive officers of the Company as a group (7
persons) (5)...................................................... 2,055,217 54.41% 49.20%
</TABLE>

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

(1) Assumes that all Securities offered in this Offering are purchased but that
the Underwriters' over-allotment option is not exercised.

(2) Includes 19,578 shares of Class A Common Stock issuable upon the exercise of
options exercisable within 60 days of the date of this Prospectus.

(3) Includes 336,512 shares of Class A Common Stock issuable upon the exercise
of options exercisable within 60 days of the date of this Prospectus.

(4) The principal beneficial owner of Synergy Group International, Inc. is
Vincent J. Marold.

(5) Includes 377,673 shares of Class A Common Stock issuable upon the exercise
of options exercisable within 60 days of the date of this Prospectus.

43
<PAGE>
CERTAIN TRANSACTIONS

AMENDMENT OF CERTIFICATE OF INCORPORATION

On October 7, 1998, the Company amended its certificate of incorporation to
create two classes of Common Stock (15,000,000 shares of Class A Common Stock
and 5,000,000 shares of Class B Common Stock) (the "Amendment"). All shares of
the Company's common equity outstanding prior to the Amendment were converted
into shares of Class A Common Stock except for 1,464,953 shares of common equity
owned by Messrs. Berger and Dodrill which were converted into Class B Common
Stock. The Class A and Class B Common Stock have identical rights, including
voting rights. Each share of Class B Common Stock will be automatically
converted into a share of Class A Common Stock on the earlier to occur of (i)
October 31, 2000 and (ii) such time as the closing price of the Class A Common
Stock shall equal or exceed $8.00 for 10 consecutive trading days. See
"Description of Securities -- Common Stock."

RECENT LOAN

Since, October, 1998, the Company has consumed all cash on hand and has
funded its operations with cash flow and loans from outside investors totaling
$225,000. Such loans shall be repaid together with accrued interest thereon from
the proceeds of this offering. See "Use of Proceeds" and "Certain Transactions."

TRANSACTIONS INVOLVING AFFILIATES OF THE COMPANY

As the Company does not have independent directors as of the date of this
Prospectus, none of the ongoing transactions, or past transactions which are now
closed, between the Company and its affiliates were approved by independent
directors. In the event the Company makes or enters into any material
transactions or loans with affiliated persons, the terms of any such
transactions will be no less favorable to the Company than those that can be
obtained from unaffiliated third parties. Additionally, any forgiveness of such
loans will be approved by a majority of the Company's independent directors,
once elected, who do not have an interest in the transactions. Such directors
will have access, at the Company's expense, to the Company's or independent
counsel.

TRANSACTIONS INVOLVING PAUL BERGER

Between August 21, 1996 and January 23, 1998, Paul Berger, Chairman of the
Board of Directors and Chief Executive Officer of the Company, made a number of
advances to the Company. On August 21, 1996, Mr. Berger advanced $10,000 to the
Company and received a note with a term of six years, earning 7.5% interest
annually and an option to purchase 19,577 shares of the common stock of the
Company at a price of $0.225 per share. In addition, Mr. Berger made four
advances to the Company using proceeds from sales of his own stock to other
individuals (some of whom were affiliates of the Company) at lower prices than
contemporaneous sales of stock by the Company to third-party investors. On
October 17, 1997, Mr. Berger advanced $50,000 to the Company after selling
100,000 shares of his stock to Synergy Group International, Inc. at the price of
$0.50 per share. On October 28, 1997, Mr. Berger advanced $50,000 to the Company
after selling 100,000 shares of his stock to Carol Dodrill, Jim Dodrill's
mother, and Bill Powell at the price of $0.50 per share. On November 11, 1997,
Mr. Berger advanced $2,500 to the Company after selling 3,333 shares of his
stock to Rodger Berman at the price of $0.75 per share. On January 23, 1998, Mr.
Berger advanced $50,000 to the Company after selling 50,000 shares of his stock
to Andrew Holder and Marc Roberts at the price of $1.00 per share. These four
transactions were contemporaneous with the Company's sale of its common stock at
$2.10 per share. On July 31, 1998, Mr. Berger advanced $17,500 to the Company.
Mr. Berger received notes from the Company for all five advances with an annual
interest rate of 12.5%. In January 1999, Mr. Berger exchanged an aggregate of
$170,000 principal amount of indebtedness plus accrued interest for an aggregate
of 39,125 shares of Common Stock and 39,125 Warrants. See "Underwriting."

44
<PAGE>
TRANSACTIONS INVOLVING JIM DODRILL

Between September 5, 1996 and January 23, 1998, Jim Dodrill, President and
General Counsel of the Company, made a number of advances to the Company. On
September 5, 1996, Mr. Dodrill advanced $30,000 to the Company and received a
note with a term of six years, earning 7.5% interest annually and an option to
purchase 58,731 shares of the common stock of the Company at a price of $0.225
per share. In addition, Mr. Dodrill made three advances to the Company using
proceeds from sales of his own stock to other individuals at lower prices than
contemporaneous sales of stock by the Company to third-party investors. On
October 17, 1997, Mr. Dodrill advanced $50,000 to the Company after selling
100,000 shares of his stock to Synergy Group International, Inc. at the price of
$0.50 per share. On November 11, 1997, Mr. Dodrill advanced $2,500 to the
Company after selling 3,333 shares of his stock to Rodger Berman at the price of
$0.75 per share. On January 23, 1998, Mr. Dodrill advanced $50,000 to the
Company after selling 50,000 shares of his stock to Andrew Holder and Marc
Roberts at the price of $1.00 per share. These three transactions were
contemporaneous with the Company's sale of its Common Stock at $2.10 per share.
Mr. Dodrill received notes from the Company for all three advances with an
annual interest rate of 12.5%. In January 1999, Mr. Dodrill exchanged an
aggregate of $102,500 principal amount of indebtedness plus accrued interest for
an aggregate of 23,467 shares of Common Stock and 23,467 Warrants. See
"Underwriting."

TRANSACTIONS INVOLVING STANLEY BERGER

Between August 13, 1996 and January 16, 1998, Stanley Berger, Paul Berger's
father,made a number of advances to the Company. The following table summarizes
the loans made. For each loan, Mr. Berger received a note with the loan amount
and interest rate set forth in the table. In addition, for all but the two
repaid loans and one loan on October 1, 1997, Mr. Berger also received a warrant
to purchase the number of shares set forth in the table and at the exercise
price set forth in the table. All of these notes, aggregating $510,000 plus
interest, were exchanged in November 1998 for 102,000 shares of Common Stock and
102,000 Warrants. See "Underwriting."

<TABLE>
<CAPTION>
NUMBER OF
SHARES
PURCHASABLE
INTEREST UPON EXERCISE WARRANT
DATE AMOUNT OF LOAN RATE OF WARRANT EXERCISE PRICE
- -------------------------------------------------------- --------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
August 13, 1996(1)...................................... $ 35,000 -- -- --
September 26, 1996...................................... $ 40,000 12.5% 4,400 $ 1.13
October 8, 1996......................................... $ 25,000 12.5% 2,750 $ 1.13
April 30, 1997.......................................... $ 25,000 12.5% 3,437 $ 0.75
May 27, 1997............................................ $ 50,000 15% 27,708 $ 0.75
June 19, 1997........................................... $ 50,000 15% 27,708 $ 0.75
July 3, 1997............................................ $ 30,000 12.5% 6,000 $ 2.10
July 10, 1997........................................... $ 15,000 12.5% 3,000 $ 2.10
August 27, 1997(1)...................................... $ 50,000 -- -- --
September 12, 1997...................................... $ 50,000 12.5% 8,333 $ 2.10
October 1, 1997(2)...................................... $ 25,000 12.5% -- --
October 14, 1997........................................ $ 50,000 12.5% 8,333 $ 2.10
November 14, 1997....................................... $ 50,000 12.5% 8,333 $ 2.10
November 28, 1997....................................... $ 30,000 12.5% 2,400 $ 2.10
December 3, 1997........................................ $ 20,000 12.5% 1,600 $ 2.10
January 16, 1998........................................ $ 50,000 12.5% 4,000 $ 4.00
Total............................................... $ 595,000 108,002
</TABLE>

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

(1) This Note was repaid.

(2) For this loan, Mr. Berger received a security interest in all of the
Company's accounts receivable.

45
<PAGE>
DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of 15,000,000 shares of
Class A Common Stock, par value $0.01 per share, 5,000,000 shares of Class B
Common Stock, par value $0.01 per share, and 5,000,000 shares of Preferred
Stock, par value $0.01 per share. As of the date of this Prospectus, 2,169,075
shares of Class A Common Stock and 1,464,953 shares of Class B Common Stock were
issued and outstanding.

COMMON STOCK

The holders of Class A and Class B Common Stock ("Common Stock") are
entitled to one vote per share. The holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors out of legally available funds. Upon liquidation, dissolution or
winding up of the Company, the holders of the Common Stock are entitled to share
ratably in all assets of the Company which are legally available for
distribution, after payment of or provisions for all debts and liabilities.
Holders of Common Stock have no preemptive, subscription, or redemption rights.
The shares of Common Stock offered hereby will be, when and if issued, fully
paid and non-assessable. The Company has agreed that for a period of 24 months
from the date of this Offering it will not sell or issue any securities (with
certain limited exceptions) without the Representative's prior written consent.
See "Risk Factors -- Representative's Influence Over Potential Future Capital
Financing."

The Company has agreed not to register the Class B Common Stock under the
Securities Exchange Act of 1934, as amended, for a period of two (2) years. The
shares of Class B Common Stock will be automatically exchanged into shares of
Class A Common Stock on a share for share basis (subject to adjustment upon the
occurrence of certain events including a dividend distribution to the holders of
Class A Common Stock, or a subdivision, combination or reclassification of the
Class A Common Stock) after the earlier to occur of (i) October 31, 2000 and
(ii) such time as the closing price for the Class A Common Stock shall equal or
exceed $8.00 for a period of 10 consecutive trading days.

PREFERRED STOCK

The Board of Directors is authorized, subject to any limitations prescribed
by law, without further stockholder approval, to issue from time to time up to
an aggregate of 5,000,000 shares of Preferred Stock in one or more series. Each
such series of Preferred Stock shall have such number of shares, designations,
preferences, voting powers, qualifications and special or relative rights or
privileges, which may include, among others, dividend rights, voting rights,
redemption and sinking fund provisions, liquidation preferences and conversion
rights, as shall be determined by the Board of Directors in a resolution or
resolutions providing for the issuance of such series. Any such series of
Preferred Stock, if so determined by the Board of Directors, may have full
voting rights with the Common Stock or superior or limited voting rights, and
may be convertible into Common Stock or another security of the Company.

The Company has granted to the Board of Directors the authority to issue
Preferred Stock and to determine its rights and preferences in order to
eliminate delays associated with a stockholder vote on specific issuances. The
issuance of Preferred Stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue any shares of Preferred
Stock. See "Description of Securities--Certain Effects of Authorized but
Unissued Stock." The Company has agreed that for a period of 24 months from the
date of this Offering it will not sell or issue any securities (with certain
limited exceptions) without the Representative's prior written consent. See
"Risk Factors -- Representative's Influence Over Potential Future Capital
Financing."

46
<PAGE>
DELAWARE LAW

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. In general, the statute prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date that the
person became an interested stockholder is approved in a prescribed manner.
Generally, a "business combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the stockholder.
Generally, an "interested stockholder" is a person who, together with affiliates
and associates, owns (or within three years prior, did own) 15% or more of the
corporation's voting stock.

As a result of the foregoing provisions, the acquisition of the Company by
means of a tender offer, a proxy contest or otherwise and the removal of
incumbent officers and directors could be made more difficult. These provisions
are expected to discourage certain types of coercive takeover practices and
inadequate takeover bids and to encourage persons seeking to acquire control of
the Company to negotiate with the Company first. The Company believes that the
benefits of increased protection of the Company's potential ability to negotiate
with the proponent of an unfriendly or unsolicited proposal to acquire or
restructure the Company outweigh the disadvantages of discouraging such
proposals because, among other things, negotiation of such proposals could
result in an improvement of their terms.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

The authorized but unissued shares of Common Stock and Preferred Stock are
available for future issuance without shareholder approval. These additional
shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and
employee benefit plans.

The existence of authorized but unissued and unreserved Common Stock and
Preferred Stock may enable the Board of Directors to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a proxy contest, tender
offer, merger, or otherwise, and thereby protect the continuity of the Company's
management. The Company has agreed that for a period of 60 months from the date
of this Offering it will not sell or issue any securities (with certain limited
exceptions) without the Representative's prior written consent. See "Risk
Factors -- Representative's Influence Over Potential Future Capital Financing."

TRANSFER AGENT

The Transfer Agent and Registrar for the Common Stock is Continental Stock
Transfer and Trust Company.

47
<PAGE>
SHARES AVAILABLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding 2,569,075
shares of Class A Common Stock (2,629,075 shares of Class A Common Stock if the
Underwriters' over-allotment option is exercised in full) and 1,464,953 shares
of Class B Common Stock. All of the shares of Class A Common Stock offered
hereby will be freely tradeable by persons other than "affiliates" of the
Company without restriction or further registration under the Securities Act.

Of the 2,569,075 shares of Class A Common Stock, 2,169,075 shares and
1,464,953 shares of Class B Common Stock (the "Restricted Shares") held by
officers, directors, employees, consultants and other stockholders of the
Company were sold by the Company in reliance on exemptions from the registration
requirements of the Securities Act and are "restricted securities" within the
meaning of Rule 144 promulgated under the Securities Act. Of the Restricted
Shares of Class A Common Stock 41,590 will be eligible for resale in the public
market as of the date of this Prospectus (the "Effective Date") in reliance on
Rule 144 under the Securities Act.

Persons who are deemed affiliates of the Company are generally entitled
under Rule 144 as currently in effect to sell within any three-month period a
number of shares that does not exceed 1% of the number of shares of the Common
Stock then outstanding or the average weekly trading volume of Common Stock
during the four calendar weeks preceding the making of a filing with the
Securities and Exchange Commission (the "Commission") with respect to such sale.
Such sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about the Company. The Company is unable to estimate accurately the number of
shares of Common Stock that ultimately may be sold under Rule 144 because the
number of shares will depend in part on the market price for the Common Stock,
the personal circumstances of the sellers and other factors. In addition to the
restrictions under Rule 144, the Company, the Representative and Messrs. Berger
and Dodrill have entered into an agreement pursuant to which the Company has
agreed not to register the Class B Common Stock for sale by either Mr. Berger or
Mr. Dodrill. See "Underwriting." The shares of Class B Stock will be
automatically exchanged into shares of Class A Common Stock on a share for share
basis (subject to adjustment upon the occurrence of certain events including a
dividend or distribution to the holders of Class A Common Stock, or a
subdivision, combination or reclassification of the Class A Common Stock) after
the earlier to occur of (i) October 31, 2000 and (ii) such time as the closing
price for the Class A Common Stock shall equal or exceed $8.00 for a period of
ten (10) consecutive trading days. See "Underwriting."

48
<PAGE>
UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement,
each of the Underwriters' named below for whom Kashner Davidson Securities Corp.
is acting as Representative, has severally agreed to purchase from the Company
and the Company has agreed to sell to the Underwriters, on a firm commitment
basis, the respective number of shares of Common Stock set forth below opposite
each such Underwriter's name:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
Kashner Davidson Securities Corp........................................... 400,000
Total.................................................................... 400,000
-----------------
-----------------
</TABLE>

The Underwriters have advised the Company that they propose to offer the
Common Stock to the public at the public offering price set forth on the cover
page of this Prospectus and that they may allow to selected dealers who are
members of the NASD, concessions of not in excess of $0.493 per share, of which
not more the $0.2465 per share may be reallowed to certain other dealers who are
members of the NASD. After the initial public offering, the public offering
price, concession and reallowance may be changed.

The Underwriting Agreement further provides that the Underwriters will
receive a non-accountable expense allowance of 3% of the aggregate public
offering price on the shares sold hereunder (including any Shares sold pursuant
to the Over-Allotment Option), which allowance amounts to $ (or $69,600 if the
Over-Allotment Option is exercised in full), of which $25,000 has been paid to
date. In addition, the Company had previously paid $50,000 for an underwriting
which was not completed. Such $50,000 has been included in underwriters
compensation for this underwriting.

The Company has granted to the Underwriters an Over-Allotment Option, which
is exercisable for a period of 45 days after the Closing, to purchase up to
60,000 additional shares (up to 15% of the shares being offered by the Company
hereby) at the public offering price, less underwriting discounts and
commissions, solely to cover over-allotments, if any.

The Underwriters have informed the Company that they will not make sales of
the shares offered by this Prospectus to accounts over which they exercise
discretionary authority.

The Company has agreed to sell to the Underwriters for a nominal
consideration, an Underwriters' Warrant to purchase up to 40,000 shares,
exclusive of the Over-Allotment Option. The Underwriters' Warrant will be
nonexercisable for one year after the date of this Prospectus. Thereafter, for a
period of four years, the Underwriters' Warrants will be exercisable to purchase
Common Stock at $9.57 per Share (165% of the initial public offering price). The
Underwriters' Warrants will be restricted from sale, transfer, assignment,
pledge or hypothecation for a period of one year from the effective date of the
Offering except to officers and partners (not directors) of the Underwriters and
members of the selling group. The Company has agreed to file, during the four
year period beginning one year from the Effective Date of this Prospectus, on
one occasion at the Company's cost, at the request of the holders of a majority
of the Underwriters' Warrants and the underlying securities, and to use its best
efforts to cause to become effective, a post-effective amendment to the
Registration Statement or a new registration statement under the Securities Act,
as required to permit the public sale of Common Stock issued or issuable upon
exercise of the Underwriters' Warrants. In addition, the Company has agreed to
give advance notice to holders of the Underwriters' Warrants of its intention to
file certain registration statements commencing one year and ending four years
after the Effective Date, and in such case, holders of such Underwriter's
Warrants or underlying shares of Common Stock shall have the right to require
the Company to include all or part of such shares of Common Stock underlying
such Underwriters' Warrants in such registration statement at the Company's
expense.

For the life of the Underwriter's Warrants, the holders thereof are given,
at nominal costs, the opportunity to profit from a rise in the market price of
the Company's securities with a resulting dilution in

49
<PAGE>
the interest of other stockholders. Further, the holders may be expected to
exercise the Underwriters' Warrants at a time when the Company would in all
likelihood be able to obtain equity capital on terms more favorable than those
provided in the Underwriters' Warrants.

The Company has agreed to retain the Representative as the Company's
financial consultants for a period of two years to commence on the closing of
this Offering, at a monthly fee of $3,125, or an aggregate of $75,000, all of
which shall be payable in advance on the closing of the Offering. Pursuant to
this agreement, the Underwriters shall provide advisory services related to
merger and acquisition activity, corporate finance and other matters.

The public offering price of the shares offered hereby has been determined
by negotiation between the Company and the Representative. Factors considered in
determining the offering price of the shares offered hereby included the
business in which the Company is engaged, the Company's financial condition, an
assessment of the Company's management, the general condition of the securities
markets and the demand for similar securities of comparable companies.

In connection with this Offering, the Underwriters and selling group members
and their respective affiliates may engage in transactions that stabilize,
maintain or otherwise affect the market price of the Common Stock. Such
transactions may include stabilization transactions effected in accordance with
Rule 104 of Regulation M, pursuant to which such persons may bid for or purchase
Common Stock for the purpose of stabilizing their respective market prices. The
Underwriters also may create a short position for the account of the
Underwriters by selling more shares of Common Stock in connection with the
Offering than they are committed to purchase from the Company, and in such case
may purchase shares of Common Stock in the open market following completion of
the Offering to cover all or a portion of such short position. The Underwriters
may also cover all or a portion of such short position by exercising the
Over-Allotment Option. Any of the transactions described in this paragraph may
result in the maintenance of the price of the Common Stock at a level above that
which might otherwise prevail in the open market. None of the transactions
described in this paragraph is required, and, if they are undertaken they may be
discontinued at any time.

The Underwriting Agreement provides for reciprocal indemnification between
the Company and the Underwriters against certain liabilities in connection with
this Offering, including liabilities under the Securities Act.

The foregoing is a summary of the material terms of the Underwriting
Agreement and the Underwriter's Warrant. Reference is made to the copies of the
Underwriting Agreement, and the Underwriters' Warrant, both of which are filed
as exhibits to the Registration Statement of which this Prospectus forms a part.

LEGAL MATTERS

The validity of the Class A Common Stock being offered hereby will be passed
upon for the Company by Sichenzia, Ross & Friedman LLP, 135 West 50th Street,
New York, NY, 10020. Certain matters are being passed upon for the Underwriters
by Gersten, Savage & Kaplowitz, LLP, 101 East 52nd Street, New York, NY 10022.

EXPERTS

The financial statements as of January 31, 1998 and 1997 and for the year
ended January 31, 1998 and the period February 8, 1996 (inception) to January
31, 1997 included in this Prospectus have been so included in reliance on the
report of PricewaterhouseCoopers LLP, independent certified public accountants,
given on the authority of said firm as experts in auditing and accounting.

50
<PAGE>
AVAILABLE INFORMATION

The Company has filed with the Commission through the Electronic Data
Gathering and Retrieval ("EDGAR") system a registration statement on Form SB-2
(together with all amendments, exhibits and schedules thereto, the "Registration
Statement") under the Securities Act with respect to the Securities offered by
this Prospectus. This Prospectus does not contain all of the information set
forth in such Registration Statement, certain parts of which have been omitted
in accordance with the rules and regulation of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement of which this Prospectus forms a part. For further
information, reference is made to such registration statement, including the
exhibits thereto, which may be inspected without charge at the Commission's
principal office at 450 Fifth Street, N. W., Room 1024, Washington D. C. 20549;
and at the following Regional Offices of the Commission, except that copies of
the exhibits may not be available at certain of the Regional Offices: Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661;
and New York Regional Office 7 World Trade Center, Suite 1300, New York, NY
10048. Copies of all or any part of such material may be obtained from the
Commission at 450 Fifth Street, N. W. Room 1024, Washington, D.C. 20549, upon
payment of certain fees prescribed by the Commission. The Commission maintains a
World Wide Web site on the Internet at http://www.sec.gov that contains reports,
proxy, information statements, and registration statements and other information
filed with the Commission through the EDGAR system.

The Company is not presently a reporting company and does not file reports
or other information with the Commission. However, on the effective date of the
Registration Statement, the Company will become a reporting company. Further,
the Company will register its Common Stock and Warrants under the Exchange Act.
Accordingly, the Company will become subject to the additional reporting
requirements of the Exchange Act and in accordance therewith will file reports,
proxy statements and other information with the Commission. In addition, after
the completion of this Offering, the Company intends to furnish its shareholders
with annual reports containing audited financial statements and such interim
reports, in each case as it may determine to furnish or as may be required by
law.

51
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Certified Public Accountants.................................... F-2
Balance Sheets at January 31, 1997, January 31, 1998 and October 31, 1998
(unaudited).......................................................................... F-3
Statements of Operations for the period February 8, 1996 (inception) to January 31,
1997, for the year ended January 31, 1998 and for the nine months ended October 31,
1997 and 1998 (unaudited)............................................................ F-4
Statement of Changes in Shareholders' Deficit......................................... F-5
Statements of Cash Flows for the period February 8, 1996 (inception) to January 31,
1997, for the year ended January 31, 1998 and for the nine months ended October 31,
1997 and 1998 (unaudited)............................................................ F-6
Notes to Financial Statements, January 31, 1998....................................... F-7
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Outlook Sports Technology, Inc.

In our opinion, the accompanying balance sheets and the related statements
of operations, of changes in shareholders' deficit and of cash flows present
fairly, in all material respects, the financial position of Outlook Sports
Technology, Inc. (formerly Hippo, Inc.) at January 31, 1998 and 1997, and the
results of its operations and its cash flows for the year ended January 31, 1998
and for the period February 8, 1996 (inception) to January 31, 1997, in
conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses and negative
cash flows from operations through January 31, 1998, has a shareholders' deficit
and working capital deficiency as of January 31, 1998, and is dependent on
raising additional financing in order to fund its existing level of operations.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

PricewaterhouseCoopers LLP

Miami, Florida
June 9, 1998

F-2
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS
JANUARY 31, OCTOBER 31, 1998
------------------------ --------------------------
1997 1998 HISTORICAL PRO FORMA
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash............................................ $ 19,041 $ 1,367 $ 73 $ 193,823
Accounts receivable, net of allowance for
doubtful accounts of $35,000; $144,156 at
October 31, 1998 (unaudited).................. -- 167,700 25,000 25,000
Inventory....................................... -- 417,058 284,599 284,599
Prepaid expenses................................ -- 12,854 59,291 59,291
Deposits and other current assets............... 7,809 51,813 15,000 15,000
----------- ----------- ------------ ------------
Total current assets........................ 26,850 650,792 383,963 577,713
----------- ----------- ------------ ------------
Prepaid royalties............................... 150,000 133,319 -- --
Property and equipment, net..................... 31,197 201,644 391,668 391,668
License......................................... 19,300 19,300 -- --
----------- ----------- ------------ ------------
$ 227,347 $ 1,005,055 $ 775,631 $ 969,381
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable.............................. $ 483,021 $ 1,962,657 $ 2,185,002 $ 2,185,002
Accrued expenses.............................. 12,500 340,951 576,307 169,173
Accrued wages and related expenses............ 131,530 260,217 483,492 483,492
Accrued interest payable...................... 2,844 223,011 659,298 659,298
Advances from officers........................ 588,660 255,000 299,147 25,000
Notes payable, current portion................ 115,000 2,665,638 6,084,648 804,648
----------- ----------- ------------ ------------
Total current liabilities................... 1,333,555 5,707,474 10,287,894 4,326,613

Notes payable, long term........................ 40,000 40,000 40,000 40,000
----------- ----------- ------------ ------------
1,373,555 5,747,474 10,327,894 4,366,613
----------- ----------- ------------ ------------
Commitments and contingencies................... -- -- -- --
----------- ----------- ------------ ------------
Shareholders' deficit:
Common stock; Class A, $.01 par value,
15,000,000 shares authorized; 1,118,488 and
2,324,071 shares issued and outstanding in
1997 and 1998, respectively, and 1,101,818
issued and 1,051,818 outstanding at October
31, 1998 (unaudited); proforma, 2,169,075
issued and 2,169,075 outstanding............ 11,185 23,241 11,018 23,441
Common Stock; Class B, $.01 par value 5,000,000
shares authorized 1,464,953 shares issued and
outstanding at October 31, 1998 (unaudited)... -- -- 14,650 14,650
Treasury stock; 50,000 Class A shares at cost
(unaudited); proforma, 175,000 Class A
shares at cost.............................. -- -- (19,300) (50,500)
Additional paid in capital.................... 1,221,159 2,306,543 2,718,329 8,917,190
Accumulated deficit........................... (2,378,552) (7,072,203) (12,276,960) (12,301,963)
----------- ----------- ------------ ------------
Total shareholders' deficit................. (1,146,208) (4,742,419) (9,552,263) (3,397,232)
----------- ----------- ------------ ------------
$ 227,347 $ 1,005,055 $ 775,631 $ 969,381
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 8,
1996
(INCEPTION) FOR THE NINE MONTHS ENDED
TO YEAR ENDED OCTOBER 31,
JANUARY 31, JANUARY 31, ----------------------------
1997 1998 1997 1998
------------- ------------- ------------- -------------
(UNAUDITED)

<S> <C> <C> <C> <C>
Revenue.............................................. $ -- $ 741,120 $ 555,681 $ 479,463
------------- ------------- ------------- -------------
Operating expenses:
Costs of sales..................................... -- 859,317 481,159 688,100
Research and development........................... 650,805 451,019 267,098 164,487
Stock-based compensation........................... 473,894 210,130 171,875 --
Selling, general and administrative expenses....... 1,251,009 3,669,657 2,333,055 4,749,687
------------- ------------- ------------- -------------
Total costs and expenses......................... 2,375,708 5,190,123 3,253,187 5,602,274
------------- ------------- ------------- -------------
Loss from operations................................. (2,375,708) (4,449,003) (2,697,506) (5,122,811)
Interest expense..................................... (2,844) (244,648) (146,120) (495,943)
Gain on sale of license.............................. -- -- -- 413,997
------------- ------------- ------------- -------------
Net loss............................................. $(2,378,552) $ (4,693,651) $ (2,843,626) $ (5,204,757)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Basic and diluted loss per share..................... $ (3.24) $ (2.21) $ (1.38) $ (2.10)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average common shares outstanding........... 734,330 2,120,460 2,060,182 2,483,509
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT

<TABLE>
<CAPTION>
COMMON STOCK
--------------------- ADDITIONAL TOTAL
PAR TREASURY PAID IN ACCUMULATED SHAREHOLDERS'
SHARES VALUE STOCK CAPITAL DEFICIT DEFICIT
---------- --------- ---------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, February 8, 1996....... -- $ -- $ -- $ -- $ -- $ --
Issuance of common stock........ 1,068,488 10,685 -- 1,128,074 -- 1,138,759
Stock option compensation....... -- -- -- 73,785 -- 73,785
Acquisition of license.......... 50,000 500 -- 19,300 -- 19,800
Net loss........................ -- -- -- -- (2,378,552) (2,378,552)
---------- --------- ---------- ------------ -------------- -------------
Balance, January 31, 1997....... 1,118,488 11,185 -- 1,221,159 (2,378,552) (1,146,208)
Issuance of common stock........ 1,205,583 12,056 -- 932,218 -- 944,274
Stock option compensation....... -- -- -- 153,166 -- 153,166
Net loss........................ -- -- -- -- (4,693,651) (4,693,651)
---------- --------- ---------- ------------ -------------- -------------
Balance, January 31, 1998....... 2,324,071 23,241 -- 2,306,543 (7,072,203) (4,742,419)
Issuance of common stock for
payment of services
(unaudited)................... 242,700 2,427 -- 411,786 -- 414,213
Treasury stock (unaudited)...... -- -- (19,300) -- -- (19,300)
Net loss (unaudited)............ -- -- -- -- (5,204,757) (5,204,757)
---------- --------- ---------- ------------ -------------- -------------
Balance, October 31, 1998
(unaudited)................... 2,566,771 $ 25,668 $ (19,300) $ 2,718,329 $ (12,276,960) $(9,552,263)
---------- --------- ---------- ------------ -------------- -------------
---------- --------- ---------- ------------ -------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 8,
1996
(INCEPTION) FOR THE NINE MONTHS ENDED
TO YEAR ENDED OCTOBER 31,
JANUARY 31, JANUARY 31, ----------------------
1997 1998 1997 1998
------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
(UNAUDITED)
Operating activities:
Net loss........................................................ $(2,378,552) ($4,693,651) $(2,843,733) $(5,204,757)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation................................................ 3,355 8,100 6,075 112,050
Stock-based compensation.................................... 473,894 210,130 171,875 --
Changes in operating assets and liabilities:
Increase in accounts receivable........................... -- (167,700) (252,479) 142,700
Increase in inventory..................................... -- (417,058) (581,710) 132,459
Increase in prepaid expenses.............................. -- (12,854) (22,198) 145,913
Increase in deposits and other current assets............. (7,809) (44,004) (26,076) 56,113
(Increase) decrease in prepaid royalties.................. (150,000) 16,681 -- 133,319
Increase (decrease) in accounts payable and accrued
expenses................................................ 629,895 2,156,941 1,368,741 1,339,126
------------- ----------- ---------- ----------
Net cash used in operating activities............................. (1,429,217) (2,943,415) (2,174,505) (3,143,077)
------------- ----------- ---------- ----------
Investing activities:
Capital expenditures............................................ (34,552) (178,547) (182,868) (302,074)
------------- ----------- ---------- ----------
Net cash used in investing activities............................. (34,552) (178,547) (182,868) (302,074)
------------- ----------- ---------- ----------
Financing activities:
Proceeds from line of credit.................................... -- 35,000 35,000 --
Advances from officers.......................................... 588,660 255,000 100,000 44,147
Proceeds from issuance of unsecured notes payable............... 190,000 2,265,500 1,995,000 3,805,000
Proceeds (payments) from (to) factor............................ -- 280,138 -- (270,490)
Repayment of unsecured notes payable............................ (35,000) (30,000) -- (115,500)
Proceeds from exercise of stock options and sale of common
stock......................................................... 739,150 298,650 234,200 --
Acquisition of treasury stock................................... -- -- -- (19,300)
------------- ----------- ---------- ----------
Net cash provided by financing activities......................... 1,482,810 3,104,288 2,364,200 3,443,857
------------- ----------- ---------- ----------
Net increase (decrease) in cash and cash equivalents.............. 19,041 (17,674) 1,827 (1,294)
------------- ----------- ---------- ----------
Cash and cash equivalents, beginning of period.................... -- 19,041 19,041 1,367
------------- ----------- ---------- ----------
Cash and cash equivalents, end of period.......................... $ 19,041 $ 1,367 $ 20,868 $ 73
------------- ----------- ---------- ----------
------------- ----------- ---------- ----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest.......................... $ -- $ 1,868 $ 772 $ 60,079
------------- ----------- ---------- ----------
------------- ----------- ---------- ----------
</TABLE>

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

In June 1998, the Company issued 125,000 shares of its common stock to obtain
financial and investment services through January 2000. Additionally, the
Company issued in June 1998, 1,666 shares of its common stock to a vendor. These
shares were valued by the Company's Board of Directors at $1.00 per share based
on the fair market value of other common stock transactions during the
particular time frame. (unaudited)

In March 1998, the Company issued 104,784 shares of its common stock to a
professional golfer as consideration for $220,047 owed to such golfer.
Additionally, the Company issued in March, 1998 11,250 shares of its common
stock valued at $67,500 in connection with endorsement contracts expiring in
December 1998 (unaudited).

During February 1997, the Company issued 1,024,800 shares of its common stock in
exchange for the forgiveness of $588,660 of advances due to the Company's Chief
Executive Officer.

During 1996, the Company issued 50,000 shares of its common stock valued at
approximately $19,800 in exchange for certain marketing rights.

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 1998

1. ORGANIZATION AND BASIS OF PRESENTATION

Outlook Sports Technology, Inc. (the Company) was incorporated on February
8, 1996 in the State of Delaware. The Company is a designer and marketer and,
through the use of contracted parties, a manufacturer of golf equipment, apparel
and accessories under the TEGRA-TM- brand name. TEGRA-TM- golf clubs incorporate
the Company's patent-pending Invisible Inset Hosel-TM-.

The Company initially entered the U.S. golf market under a license agreement
with Hippo Holdings, Ltd. ("Hippo Holdings"), a British golf equipment
manufacturer and distributor. Under the terms of the licensing agreement, the
Company acquired the rights, in perpetuity, to market and sell HiPPO-TM- brand
products in the U.S. and Canada for 50,000 shares of the Company's common stock,
and prepaid $150,000 of royalties. In May 1998, the Company sold this license
back to Hippo Holdings. (See Note 9.)

Since its inception in 1996 to January 31, 1998, the Company has incurred
recurring losses, has not generated cash from its operating activities and is
dependent on raising additional financing in order to fund its existing level of
operations. Additionally, at January 31, 1998, the Company's current liabilities
exceeded its current assets by approximately $5,057,000, and the Company had an
accumulated deficit of approximately $4,742,000. These factors, among others,
raise substantial doubt about the Company's ability to continue as a going
concern. These financial statements do not reflect any adjustments that might
result from the outcome of this uncertainty.

In connection with the above, the Company's management intends to execute an
initial public offering under which the Company expects to sell shares of its
common stock as well as warrants to acquire shares of common stock. Proceeds
from the offering are expected to be used to repay the Company's outstanding
notes payable (see Note 5) and fund inventory purchases and ongoing operations.
There can be no assurance that such offering will be successful. If the offering
is not successful, management will seek alternative financing.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting policies followed by the Company in the
preparation of the accompanying financial statements is presented below.

ACCOUNTING ESTIMATES

The preparation of financial statements 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 these estimates.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The interim financial data of the Company is unaudited. Certain information
and footnote disclosures normally included in the financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted. In the opinion of management, the interim financial statements
includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results of the Company's operations for
the interim periods presented. The results of

F-7
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
operations for the nine month period ended October 31, 1998 are not necessarily
indicative of the results for the full year.

CASH

The Company considers those short term, highly liquid investments with
original maturities of three months or less as cash.

INVENTORY

Inventory, which is primarily comprised of clubs and component parts, is
stated at the lower of cost or market with cost determined using the first-in,
first-out (FIFO) method. Component parts consist primarily of golf club heads,
shafts and grips.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated using the
straight line method over the estimated useful lives of the assets. Significant
additions and improvements are capitalized and costs for maintenance and repairs
are expensed as incurred.

LICENSE

The license to market HIPPO-TM- brand golf products in the U.S. and Canada
is recorded at the estimated fair value of 50,000 shares issued in May 1996 as
consideration for such license (see Note 9).

LONG LIVED ASSETS

The Company reviews long lived assets and identifiable intangibles for
recoverability and reserves for impairment whenever events or changes in
circumstances indicate, based on estimated future cash flows, the carrying
amount of the assets will not be fully recoverable.

REVENUE RECOGNITION

Revenue from the sale of non consignment products is recognized at the time
title to such products passes to the customer. Revenue from the sale of products
delivered on consignment is recognized at the time such products are sold by the
customer.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs, which relate primarily to the design of the
TEGRA-TM- brand name products, are expensed as incurred.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising expense consists of
media advertising as well as brochure, production and direct mail costs.
Advertising expense approximated $1,033,000 for the year ended January 31, 1998.

F-8
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

The Company records deferred income taxes using the liability method. Under
the liability method, deferred tax assets and liabilities are recognized for the
expected future tax consequences of temporary differences between the financial
statement and income tax bases of the Company's assets and liabilities. An
allowance is recorded, based upon currently available information, when it is
more likely than not that any or all of a deferred tax asset will not be
realized. The provision for income taxes includes taxes currently payable, if
any, plus the net change during the year in deferred tax assets and liabilities
recorded by the Company.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation to its employees using the
intrinsic value method, which requires the recognition of compensation expense
over the vesting period of the options when the exercise price of the stock
option granted is less than the fair value of the underlying common stock.
Additionally, the Company provides pro forma disclosure of net loss and loss per
share as if the fair value method had been applied in measuring compensation
expense for stock options granted. Stock-based compensation related to options
granted to non-employees is recognized using the fair value method.

LOSS PER SHARE

The computation of loss per share of common stock is computed by dividing
net loss for the period by the weighted average number of shares outstanding
during that period. The weighted average number of shares outstanding for the
period February 8, 1996 (inception) to January 31, 1997 and the year ended
January 31, 1998 excludes approximately 274,000 and 1,179,000 respectively, of
antidilutive stock options and warrants.

Because the Company is incurring losses, the effect of stock options and
warrants is antidilutive. Accordingly, the Company's presentation of diluted
earnings per share is the same as that of basic earnings per share.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of the Company's financial instruments, including cash
and cash equivalents, accounts receivable, accounts payable, accrued expenses
and notes payable approximated fair value because of the short maturity of these
instruments. The Company routinely assesses the financial strength of its
customers and records an allowance for doubtful accounts when it determines that
collection of a particular amount is unlikely.

F-9
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

3. INVENTORY

Inventory at January 31, 1998 consists of the following:

<TABLE>
<CAPTION>
Components parts.................................................. $ 126,340
<S> <C>
Clubs............................................................. 278,715
Apparel, golf accessories and other............................... 12,003
---------
$ 417,058
---------
---------
</TABLE>

At January 31, 1998, the Company had inventory of approximately $134,000 on
consignment at various customer locations. The consigned inventory did not
include any HIPPO-TM- brand products.

4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
JANUARY 31, ESTIMATED
--------------------- USEFUL LIVES
1997 1998 (IN YEARS)
--------- ---------- ---------------
<S> <C> <C> <C>
Furniture and fixtures................................... $ -- $ 169,215 3
Equipment................................................ 34,552 43,884 3
--------- ----------
34,552 213,099
Accumulated depreciation................................. (3,355) (11,455)
--------- ----------
$ 31,197 $ 201,644
--------- ----------
--------- ----------
</TABLE>

The Company recorded depreciation expense related to its property and
equipment of $3,355 and $8,100 for the period ended January 31, 1997 and the
year ended January 31, 1998, respectively.

F-10
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

5. NOTES PAYABLE

The Company's notes payable are as follows:

<TABLE>
<CAPTION>
JANUARY 31,
-------------------------- OCTOBER 31,
1997 1998 1998
----------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
Unsecured notes payable to private investors, due September 1998 (see
below)............................................................... $ -- $ 50,000 $ 3,905,000
Unsecured notes payable to private investors, due September 1998,
interest at 12.5%.................................................... 115,000 1,705,000 1,360,000
Unsecured notes payable to private investors, due September 1998,
interest at 15%...................................................... -- 525,000 525,000
Unsecured notes payable to private investors, due September 1998,
interest at 24%...................................................... -- 70,500 --
Unsecured notes payable to private investors, due April 1999, interest
at 7.5%.............................................................. -- -- 250,000
Unsecured line of credit, interest at the bank's prime rate plus 2%
(10.5% at January 31, 1998), guaranteed by the Company's President
and Chief Executive Officer, due on demand........................... -- 35,000 35,000
Long term unsecured notes payable to the Company's President and Chief
Executive Officer, interest at 7.5%, due by September 2002........... 40,000 40,000 40,000
Advances from factor, interest at 24%, due on demand................... -- 280,138 9,648
----------- ------------- -------------
155,000 2,705,638 6,124,648
Current portion........................................................ (115,000) (2,665,638) (6,084,648)
----------- ------------- -------------
$ 40,000 $ 40,000 $ 40,000
----------- ------------- -------------
----------- ------------- -------------
</TABLE>

In January 1998, as part of a proposed $3,500,000 debt offering, the Company
issued a $50,000 note payable maturing at the earlier of September 1998 or
within 5 days after an initial public offering of the Company's common stock
generating in excess of $7 million of gross proceeds. Under the terms of the
debt financing, the holder of the $50,000 note payable has the option to receive
interest in the amount of $3,125 or warrants to purchase 25,000 shares of the
Company's common stock at a price per share equal that to be offered in
connection with the offering of warrants under the Company's planned initial
public offering, which management expects to be 115% of the per share initial
public offering price.

Under the terms of the original issuance of 12.5% unsecured notes payable to
private investors, the notes were due at the earlier of September 30, 1997, or
an initial public offering of the Company's common stock. Additionally, the
Company issued $275,000 of such notes during or subsequent to September 1997
which had a maturity of September 1998 or within 5 days of an initial public
offering, if earlier. The 12.5% debt included 231,400 warrants to purchase the
Company's common stock at prices ranging from $0.75 to $3.99 per share.

F-11
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

5. NOTES PAYABLE (CONTINUED)
Under the original terms of the 15% unsecured notes payable to private
investors, the notes were due at the earlier of September 30, 1997, or an
initial public offering of the Company's common stock. The terms of the debt
included 232,750 warrants to purchase the Company's common stock at $0.75 per
share.

At January 31, 1998, the Company was in default of the terms of the 12.5%
and 15% unsecured notes payable to private investors which were due during
September 1997. During February 1998, the Company obtained a specific waiver to
extend the maturity of the then outstanding unsecured notes payable through the
earlier of September 1998 or within 5 days after an initial public offering of
the Company's common stock generating in excess of $7.5 million of gross
proceeds.

As a result of the extension of the maturity of the 15% and certain of the
Company's 12.5% unsecured notes payable to September 1998, the Company issued to
the holders of such unsecured notes, warrants to purchase 85,000 shares of the
Company's common stock at $0.75 per share, warrants to purchase 98,333 shares of
the Company's common stock at $3.00 per share and warrants to purchase 31,666
shares of the Company's common stock at $2.10 per share. The warrants were
exercisable in full at the time of their issuance and expire on the dates of
expiration of the warrants issued under the terms of the original debt.

The Company's management believes that at the time of their issuance, the
warrants issued in connection with the Company's unsecured notes payable had no
value due to the financial condition of the Company as explained in Note 1.
Accordingly, no portion of the proceeds from the issuance of the notes was
allocated to the warrants nor was any value assigned to warrants issued in
connection with the extension of the maturity of certain unsecured notes as
described above.

In February and May 1998 the Company repaid an aggregate of $68,500 and
$47,000, respectively, of unsecured notes payable to private investors
representing notes bearing interest at 12.5% and 24%.

At January 31, 1998, the Company had received advances of approximately
$115,000 in excess of those permitted under the factoring agreement, resulting
in the Company being in default of such agreement. As a result of the default,
the factor had the right to terminate the agreement and demand payment of the
funds advanced. Subsequent to year end, the Company has reduced the amounts
outstanding under the factoring agreement and currently is within the borrowing
base of such agreement.

At January 31, 1998, the Company had accrued interest under its unsecured
notes payable in the aggregate amount of approximately $223,000.

At January 31, 1998, $410,000 and $100,000 of the 12.5% and 15% unsecured
notes payable, respectively, were held by a related party. Accrued interest and
interest expense of approximately $34,000

F-12
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

5. NOTES PAYABLE (CONTINUED)
and $31,000, respectively, was recorded in regards to these unsecured notes
payable as of and for the year ended January 31, 1998.

During the period February to June 1998, the Company obtained debt financing
amounting to approximately $3.4 million (amounts outstanding at January 31, 1998
and October 31, 1998 were $50,000 and $3,905,000, respectively). This debt
matures at the earlier of September 1998, or within 5 days of an initial public
offering of the Company's common stock generating in excess of $7 million of
gross proceeds. Under the terms of the debt financing, each holder of a $50,000
note payable has the option to receive interest in the amount of $3,125 or
warrants to purchase 25,000 shares of the Company's common stock at a price per
share equal to that to be offered in connection with the offering of warrants
under the Company's intended initial public offering, which management expects
to be 115% of the per share initial public offering price.

6. SHAREHOLDERS' DEFICIT

STOCK SPLITS AND NUMBER OF AUTHORIZED SHARES

In August 1996, the Company increased the number of authorized shares of
common stock from 250,000 to 6,500,000 and simultaneously effected a 15-for-1
stock split. In February 1997, the Company increased the number of authorized
shares of common stock from 6,500,000 to 10,881,000 and simultaneously effected
a 3-for-2 reverse stock split. In July 1997, the Company increased the number of
authorized shares of common stock from 10,881,000 to 24,300,000. On January 31,
1998, the Company decreased the authorized shares of Common Stock to 8,100,000
and simultaneously effected a 3-for-1 reverse stock split.

All references to the number of common shares and per share amounts
elsewhere in the financial statements and related footnotes have been restated
to reflect the effect of all stock splits for all periods presented.

See Note 10.

COMMON STOCK

During February 1997, the Company's Chief Executive Officer was issued
approximately 1,025,000 shares of the Company's common stock in return for the
forgiveness of $588,660 in advances to the Company at various dates during 1996
and 1997. The Company recorded approximately $57,000 of compensation expense in
connection with the issuance of such shares based on the fair market value of
the shares as determined by an independent valuation. Also, during the year
ended January 31, 1998, the Company sold approximately 181,000 shares of its
common stock for $299,000, of which 4,833 shares were sold to a related party.

In May 1996, the Company issued 50,000 shares of its common stock to Hippo
Holdings in exchange for the perpetual rights to market and sell HiPPO-TM- brand
products in the U.S. and Canada. These shares were valued by the Company's Board
of Directors at $19,800, the estimated fair value, and their issuance recorded
as an intangible asset in the accompanying balance sheets at January 31, 1997
and 1998 (see Note 9).

F-13
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

6. SHAREHOLDERS' DEFICIT (CONTINUED)
At various dates during the period ended January 31, 1997, the Company's
President and Chief Executive Officer purchased approximately 992,000 shares of
the Company's common stock for $529,000. In connection with the sale of such
shares to the Company's Chief Executive Officer, the Company recorded
compensation expense of approximately $400,000 for the period ended January 31,
1997 based on fair market value of shares issued to other investors during the
particular time frame.

Additionally, during the period ended January 31, 1997, the Company issued,
to third parties, approximately 77,000 shares of its common stock for $210,000.

COMMON STOCK WARRANTS

In connection with the issuance of its unsecured notes payable to private
investors, the Company issued warrants to purchase shares of its common stock as
follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
WARRANTS PRICE
--------- -----------
<S> <C> <C>
Warrants issued in connection with $65,000 of notes payable at 12.5%........................ 7,150 $ 1.13
--------- -----
BALANCE AT JANUARY 31, 1997................................................................. 7,150 1.13
Warrants issued in connection with $975,000 of notes payable at 12.5%....................... 107,250 0.75
Warrants issued in connection with $525,000 of notes payable at 15%......................... 232,750 0.75
Warrants issued in connection with $420,000 of notes payable at 12.5%....................... 84,000 2.10
Warrants issued in connection with other notes payable...................................... 33,000 2.33
--------- -----
BALANCE AT JANUARY 31, 1998................................................................. 464,150 $ 1.75
--------- -----
--------- -----
</TABLE>

The Company believes, based on an independent valuation, that the above
warrants had an insignificant fair market value at the time of their issuance.
The above warrants do not include 25,000 warrants issuable at the election of a
debt holder in connection with a $50,000 note payable issued by the Company in
January 1998 (see Note 5).

COMMON STOCK OPTIONS

On September 4, 1996, the Company adopted an Incentive Stock Plan (the
"Plan") allowing the Company to issue 500,000 incentive stock options to
employees and non-qualified options to either employees or consultants. The
total number of shares with respect to which options may be granted was
increased to 1.1 million on January 24, 1997.

F-14
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

6. SHAREHOLDERS' DEFICIT (CONTINUED)
The Company has issued various stock options to employees and consultants.
The options' vesting period varies from full vesting upon issuance of options to
vesting over a three year period. A summary of the Company's stock options
activity is as follows:

<TABLE>
<CAPTION>
OPTIONS
----------------------
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
--------- -----------
<S> <C> <C>
Balance, February 8, 1996................................................................... -- $ --
Granted..................................................................................... 267,531 0.82
--------- -----
Balance, January 31, 1997................................................................... 267,531 0.82
Granted..................................................................................... 448,880 3.04
--------- -----
Balance, January 31, 1998................................................................... 716,411 $ 2.21
--------- -----
--------- -----
</TABLE>

<TABLE>
<CAPTION>
WEIGHTED
OUTSTANDING EXERCISABLE AVERAGE
----------- ----------- EXERCISE
EXERCISE PRICE RANGE SHARES SHARES PRICE
- ----------------------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
$0.225....................................................................... 85,476 85,476 $ 0.225
0.72-0.75................................................................... 169,161 125,204 $ 0.729
2.10-3.00................................................................... 384,608 286,624 $ 2.550
6.00........................................................................ 77,166 24,000 $ 6.000
----------- -----------
716,411 521,304 $ 2.210
----------- -----------
----------- -----------
</TABLE>

The Company generally grants options at exercise prices equal to the
estimated market value of the Company's common stock at the date of the grant.
The Company recognized approximately $74,000 and $153,000 of stock-based
compensation expense during the periods ended January 31, 1997 and 1998,
respectively, relating to options granted at exercise prices below the estimated
fair market value of the Company's common stock at the date of grant. Had
compensation costs for the Company's stock option grants to employees been
determined using the fair value method, the Company's loss and loss per share
for the year ended January 31, 1998 would not have been significantly different
from the amounts recorded.

Fair market value information for the Company's stock warrants and options
for the period February 8, 1996 (inception) to January 31, 1997 and the year
ended January 31, 1998 was estimated using the Black-Scholes option pricing
model assuming risk free rates of 5.6% to 6.5%, no dividend yield, expected
terms of 3 years, and no significant volatility.

7. INCOME TAXES

The Company is subject to federal and state income taxes but has not
incurred a liability for such taxes due to losses incurred. The Company had
deferred tax assets of approximately $812,000 and $2,414,000 at January 31, 1997
and 1998, respectively, resulting primarily from net operating loss
carryforwards. The deferred tax assets have been fully offset by a valuation
allowance resulting from the uncertainty

F-15
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

7. INCOME TAXES (CONTINUED)
surrounding the future realization of the net operating loss carryforwards.
These carryforwards are available to offset future taxable income, if any,
through 2013. Limitations on the utilization of the Company's net operating tax
loss carryforwards could result in the event of certain changes in the Company's
ownership.

8. COMMITMENTS AND CONTINGENCIES

The Company leases office space and equipment under noncancelable operating
lease arrangements. Rent expense for the period February 8, 1996 (inception) to
January 31, 1997 and for the year ended January 31, 1998 was approximately
$46,000 and $101,000, respectively.

Minimum future rental payments on non-cancelable operating leases with
remaining lease terms of one or more years are as follows at January 31, 1998:

<TABLE>
<S> <C>
JANUARY 31,
1999.............................................................. $ 93,883
2000.............................................................. 36,951
2001.............................................................. 3,953
2002.............................................................. 549
---------
Total minimum future rental payments.............................. $ 135,336
---------
---------
</TABLE>

The Company has entered into an endorsement contract with a professional
golfer for endorsement of the TEGRA-TM- brand. Under the terms of the contract,
the professional golfer will wear TEGRA-TM- headwear and apparel, play TEGRA-TM-
clubs and carry a TEGRA-TM- bag and accessories in professional competitions and
in any golf related activities worldwide.

Total minimum annual payments under the endorsement contract are as follows:

<TABLE>
<S> <C>
JANUARY 31,
1999........................................................... $ 147,500
2000........................................................... 152,500
2001........................................................... 120,000
----------
Total minimum future endorsement contract commitments.......... $ 420,000
----------
----------
</TABLE>

The Company has commitments under employment and design consulting contracts
expiring through November 1999. The terms of the present design consulting
contract entered into in October 1996, as amended in April 1997, include a
monthly retainer and royalty payments based on a percentage of cost of sales of
the designed products. The designer also received 6,666 options at $0.75 per
share which vest 3,333 each at December 31, 1997 and at December 31, 1998, upon
final performance of the contract. In connection with these options, no amount
was recorded as compensation expense as the Company's management believes these
options had an insignificant fair market value at the time of issuance based on

F-16
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

8. COMMITMENTS AND CONTINGENCIES (CONTINUED)
an independent appraisal. The Company is currently negotiating an extension of
the design consulting contract. Total minimum annual payments under these
contracts are as follows:

<TABLE>
<S> <C>
JANUARY 31,
1999.............................................................. $ 192,500
2000.............................................................. 46,667
---------
Total minimum future employment and design consulting contract
commitments..................................................... $ 239,167
---------
---------
</TABLE>

The Company entered into an agreement with Hippo Holdings under which the
Company was to pay a percentage of the endorsement fee paid by Hippo Holdings to
a professional golfer. In connection therewith, the Company accrued
approximately $220,000 during the year ended January 31, 1998. This agreement
was terminated upon the sale back to Hippo Holdings of its license (see Note 9).

As of January 31, 1998, the Company had entered into purchase agreements
with various suppliers for components and finished goods for both TEGRA-TM- and
HiPPO-TM- brand products, approximating $1.3 million (see Note 9).

The Company is a defendant in a lawsuit alleging patent infringement and,
additionally, has received a request that the Company review its TEGRA-TM- line
of clubs in view of a patent issued to a third party relating to golf club
design. The Company believes that its TEGRA-TM- brand golf clubs do not infringe
the patents which are the subject of the lawsuit or the review request. However,
no assurance can be given that the Company's product does not infringe such
patents, or any other golf club related patent. Further, the Company cannot
currently estimate the effect of an adverse decision in connection with these
matters on the Company's financial condition or results of operations.

See Note 10.

9. SUBSEQUENT EVENTS

In March 1998, the Company issued 104,784 shares to a professional golfer as
consideration for $220,047 owed to such golfer under the Company's endorsement
arrangement with Hippo Holdings. The Company is currently negotiating an
endorsement contract with this professional golfer for the Company's TEGRA-TM-
brand products.

In May 1998, the Company sold its license to sell HiPPO-TM- products in the
U.S. back to Hippo Holdings along with all existing HiPPO-TM- brand inventory of
approximately $62,000, prepaid royalties of approximately $133,000, and the
assumption of liabilities in the amount of approximately $225,000. The Company
received a cash payment of approximately $359,000. A gain of approximately
$389,000 will be recorded in connection with this transaction. In addition,
Hippo Holdings returned to the Company the 50,000 shares of common stock it had
received upon entering the license agreement; no gain or loss will be recorded
in connection with the return of the stock. Furthermore, Hippo Holdings assumed
the Company's then outstanding purchase commitments in the amount of
approximately $1,172,000 related to the HiPPO-TM- brand of products. Sales of
HiPPO-TM- brand products for the year ended January 31, 1998, and the three
months ended April 30, 1998, were approximately $589,000 and $24,000,
respectively.

On April 29, 1998, the Company entered into an agreement with a financial
advisor to obtain financial investment services through January 22, 2000. The
consideration provided for in the agreement was

F-17
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

9. SUBSEQUENT EVENTS (CONTINUED)
125,000 shares of the Company's Common Stock. The Company recorded $125,000 as a
deferred charge to be amortized over the period of the agreement.

See Note 10.

10. UNAUDITED SUBSEQUENT EVENTS AND PRO FORMA INFORMATION

In October 1998, the Company increased the authorized shares of common stock
from 8,100,000 to 20,000,000. Within the authorized shares of common stock, the
Company created a Class A and a Class B stock, consisting of 15,000,000 and
5,000,000 shares of stock, respectively. Additionally, the Company authorized
5,000,000 shares of preferred stock, par value $0.01 per share.

On October 7, 1998, the Company's President and Chief Executive Officer
converted an aggregate of 1,464,953 shares of their Class A Common Stock to the
equivalent number of Class B Common Stock. The Company has agreed not to
register the Class B Common Stock under the Securities Exchange Act of 1933 for
a period of two years. Otherwise, the rights of the holders of Class A and Class
B Common Stock are substantially the same.

In November 1998, the Company executed exchange agreements with certain
noteholders and officers which had advanced funds to the Company, whereby such
parties exchanged an aggregate of $6,121,284 of principle and interest on notes
and advances for 1,224,257 Class A shares of Common Stock and 1,224,257 warrants
to acquire Class A shares of Common Stock. Of the accrued interest converted,
$25,003 was incurred subsequent to October 31, 1998. Subsequent to such
exchange, the Company remained in default of approximately $375,000 of
indebtedness under the terms of the outstanding loan agreements.

Subsequent to October 31, 1998, the Company received $225,000 in exchange
for notes payable bearing interest at rates between 10% and 12% with an
equivalent face amount, and 18,000 shares of the Company's Class A Common Stock.
Of the notes issued, $75,000 mature from February 17 to February 23, 1999 and
$150,000 mature on the earlier of October 1, 1999 or 5 days subsequent to the
completion of an initial public offering by the Company. The Company valued the
shares issued in connection with this transaction at $90,000 based on the
exchange transactions described in the preceding paragraph.

In March 1999, the Company agreed to reacquire 125,000 shares of Class A
Common Stock for $31,250. These shares were originally issued to Argent
Securities, Inc. in April 1998 in connection with a two year consulting
agreement.

The accompanying pro forma balance sheet information reflect the previously
described exchange agreements, the issuance of $225,000 of Class A Common Stock
and notes, and the Company's agreement to repurchase 125,000 shares of Class A
Common Stock for $31,250, as if such transactions had taken place on October 31,
1998.

The Company is a defendant in a lawsuit alleging breach of contract for
advertising services in an amount of approximately $200,000. The Company's
management believes its defense to be meritorious; however, there can be no
assurance that the Company will prevail.

The Company is a defendant in a lawsuit alleging the breach of a letter of
intent with an underwriter. The lawsuit seeks approximately $1.5 million in
damages. The Company believes this claim is without merit and intends to
vigorously defend itself; however, there can be no assurance that the Company
will prevail.

F-18
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1998

10. UNAUDITED SUBSEQUENT EVENTS AND PRO FORMA INFORMATION (CONTINUED)
The Company received an additional payment of approximately $54,000 from
Hippo Holdings in connection with the sale of the Company's license to produce
HiPPO-TM- products. Accordingly, the gain on the sale was increased by
approximately $25,000.

F-19
<PAGE>
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. 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 SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary.............................. 4
Risk Factors.................................... 10
Use of Proceeds................................. 22
Dilution........................................ 23
Capitalization.................................. 24
Dividend Policy................................. 24
Selected Financial Data......................... 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 27
Business........................................ 30
Management...................................... 38
Principal Shareholders.......................... 43
Certain Transactions............................ 44
Description of Securities....................... 46
Shares Available for Future Sale................ 48
Underwriting.................................... 49
Legal Matters................................... 50
Experts......................................... 50
Available Information........................... 51
Index to Financial Statements................... F-1
</TABLE>

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

UNTIL APRIL 9, 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

400,000 SHARES OF
CLASS A COMMON STOCK

OUTLOOK SPORTS TECHNOLOGY, INC.

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

PROSPECTUS

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

KASHNER DAVIDSON
SECURITIES CORP.

March 16, 1999

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