OUTLOOK SPORTS TECHNOLOGY INC, 10KSB, 2000-05-15

OUTLOOK SPORTS TECHNOLOGY INC
10KSB, 2000-05-15
SPORTING & ATHLETIC GOODS, NEC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2000

Commission File Number 333-89941

FUSION FUND, INC.
------------------------------------------------------

(Exact name of registrant as specified in its charter)

Delaware 65-0648808
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1 World Trade Center, Suite 7967
New York, NY 10048
(Address of principal executive offices) (Zip Code)

(212) 775-7020
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of
the Act:

Common Stock, par value $0.01 per share
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ X]

The Company's net revenues from its discontinued operations for the year
ended January 31, 2000 were $88,474.

As of April 30, 2000 the aggregate market value of the voting stock held by
non-affiliates of the registrant (based on The Over the Counter Electronic
Bulletin Board's last sale price of $10.00 on April 30, 2000) was $57,021,310.

As of April 30, 2000, there were 5,702,131 shares of the registrant's
common stock outstanding.

<PAGE>
PART I.

Item 1. DESCRIPTION OF BUSINESS

History of the Company

The Company was founded as Hippo, Inc., a golf equipment and apparel
manufacturer, in February 1996. In July 1997, the Company entered into a
licensing agreement with Hippo Holdings, Ltd., a leading European manufacturer
of value-priced golf equipment, to manufacture, market and distribute the HiPPO
brand of golf equipment in the United States and Canada. In January 1998, the
Company changed its name to Outlook Sports Technology, Inc. to reflect the
Company's widening research and development operations. In May 1998, the Company
sold its license to sell HiPPO-TM- products in the U.S. back to Hippo Holdings,
Ltd. along with its existing HiPPO-TM- inventory, marketing materials and
related liabilities. That same month, the Company discontinued its distribution
of value-priced golf and focused its efforts on the sale of proprietary Tegra
brand premium grade golf products.

In the first three months of the year 2000, the Company underwent
significant management changes and redirected its business mission. On January
11, 2000, Paul H. Berger resigned from his positions as Chairman of the
Company's Board of Directors and Treasurer and Jim Dodrill resigned from his
positions as President, General Counsel, and Director of the Company. After a
brief restructuring period, Mae Davis Group, an investment banking firm whose
clients hold a majority interest in the Company, approached several of their
business associates to redirect and manage the Company. In February 2000, the
Company appointed Adam Goldberg as it's President and Chairman of the Board of
Directors, and Steven Angel as its Secretary and Executive Vice President.

In March 2000, the Company set forth to strengthen its financial position
and redefine its business mission. As of January 31, 2000, shortly after the
resignation of its prior management, the Company owed approximately $4,523,000
to various creditors. On May 1, 2000, the Company completed privately placed
approximately $1,284,000 of its common stock to accredited investors. The
proceeds from this private placement are currently being used to satisfy this
debt, in addition to supplementing the Company's working capital. While the
Company is making every effort to satisfy these obligations, it may be forced to
seek legal protection from its creditors under United States Bankruptcy Code in
the event that these efforts are unsuccessful.

During this same month, the Company launched its redefined business mission
as an Internet technology and e-commerce incubator. The Company's new business
model provides early stage client companies with extensive management,
marketing, finance and business development resources in exchange for equity
positions in their businesses. In light of this shift in focus, the Company
formed a wholly owned Delaware subsidiary, Fusion Fund, Inc., which it merged
with and into the Company on March 27, 2000, for the sole purpose of changing
its name to Fusion Fund, Inc. In connection with the merger, the stock began
trading under the symbol "FUFU" in place of its previous symbol "TGRA" on
Friday, March 31, 2000.

The Company is currently focused on serving its prospective client
companies and reviewing and selecting potential incubation candidates.

<PAGE>
General

The Company provides full service venture capital incubation to promising
Internet companies in return for equity interests in these clients' businesses.
The Company provides its clients with financial, managerial, and networking
expertise to assist their development and growth in Internet and e-commerce
markets. The Company intends to expand upon the models of incubators such as
CMGI, Internet Capital Group, and Safeguard Scientifics by allowing smaller
investors to participate in Internet venture capital financing.

The Company's incubation model focuses on existing public companies and
growing companies that intend to go public, after an accelerated, intensive
development period. In addition to providing extensive services and support to
its clients individually, the Company plans to acquire a community of companies
that will provide services and support to one another during the incubation
process. Initially, the Company plans to invest $1,000,000 to $5,000,000 in each
qualified company, but the Company is not limited to a fixed investment in the
event that an appropriate opportunity arise.

Current Incubator Clients

The Company has entered into non-binding letters of intent to obtain equity
interests in two prospective incubator clients: UpLinkUS, Inc and InfoActiv,
Inc.

UpLinkUS, Inc. purchases, installs, and maintains pay-per-use Internet
kiosk terminals designed to provide users in high traffic locales, such as
shopping malls, mass transit centers, and business waiting areas, with reliable,
convenient, and efficient Internet access. Through these advanced kiosks,
UpLinkUS, Inc. plans to offer its customers broadband access to the Internet as
well as proprietary Internet based services.

InfoActiv, Inc. provides advanced, customer-oriented voice messaging
solutions and consulting services to clients worldwide. Since 1988, InfoActiv
has developed and deployed voice messaging solutions tailored to varied client
requirements in the telecommunications, finance, health care, entertainment, and
government business sectors. InfoActiv's newest product is a patent-pending
MessageFinder(TM) Gateway Service, which allows telephony and Internet service
companies to provide their customers voice, fax or e-mail message retrieval from
multiple mailbox services from different companies. Customers can access these
messages through any single point of access such as their current telephone,
Internet, mobile phone, or Internet-enabled mobile phone. Unlike unified mailbox
services provided by its competitors, InfoActiv's service allows users to access
multiple mailbox services provided by their own suppliers, such as a local
telephone company or ISP, using a single phone call or Internet session. In
addition, unlike other services, these customers do not have to change telephone
numbers or e-mail addresses to listen to their e-mail messages over the phone or
retrieve their voice messages with a PC.

Marketing

General.

The Company's marketing and promotion strategy targets up and coming
internet technology companies through traditional print media advertisements, in
addition to selective informational mailings. We intend to increase our exposure
significantly through our developing online efforts.

<PAGE>
Internet. The Company is currently constructing a web site on the Internet,
which it expects will be operational by July 2000. The site will contain
information about the Company's services, in addition to its clients' products
and services.

INTELLECTUAL PROPERTY

Where appropriate, the Company seeks intellectual property protection for
its proprietary products and services and those of its clients.

On May 3, 1999, the Company's incubator client, InfoActiv, Inc. filed a
provisional U.S. patent application covering its MessageFinder(TM) Gateway
Service. On May 3, 2000, InfoActiv, Inc. filed a U.S. Utility Application and a
PCT International patent application. Each of these filings is currently being
processed.

The Company intends to seek further intellectual property protection on its
proprietary technology, and its clients' technology, if appropriate.
Nonetheless, there can be no assurance that intellectual property protection
will issue from any of the Company's pending or any future applications or that
any claim 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.

COMPETITION

The Company competes with a number of established venture capital providers
specializing in Internet businesses, many of which have greater financial and
other resources than the Company. Some of the Company's competitors include
CMGI, Internet Capital Group, and Safeguard Scientifics. The Company competes
with these entities primarily by focusing on smaller investors for its venture
capital financing, providing a wide array of expertise through its advisory
committee, and developing a portfolio of smaller, strategic ventures that
demonstrate early-stage entrepreneurial visions of the future of the Internet.

The Company believes that many of its current technology incubator
competitors are focusing on the "adolescent" stage of new ventures to minimize
risk of failure by assuring that their clients are firmly established before
provide them with assistance. The Company distinguishes themselves from this
competition by assisting newer, smaller entrepreneurs that meet the company's
screening criteria and companies that have established themselves but need
assistance in furthering their efforts. While this target portfolio is broad,
the Company intends to carve out a market for smaller ventures to get the
financial backing and managerial support they need to succeed in a competitive
market.

EMPLOYEES

At April 30, 2000, the Company had fourteen employees and consultants,
including one full-time and one part-time executive, managerial, and supervisory
employee, five Internet and business consultants, and a seven member advisory
panel. On July 1, 1999, the Company entered into a five year consulting
agreement with Gary A. Rogers for general business and merger and acquisition
consulting. On February 1, 2000, the Company entered into a second one year
consulting agreement with Gary A. Rogers for more extensive performance than the
parties had previously contemplated. Pursuant to the second consulting
agreement, Mr. Rogers is to be paid compensation of 162,500 shares of the
Company's common stock, which shares were registered using Form S-8 on March 29,
2000.

<PAGE>
On February 2, 2000, the Company entered into a consulting agreement with Sobel
Consulting Services, LLC for internet and e-commerce specialized consulting
services to be provided by four consultants. None of the Company's employees is
covered by a collective bargaining agreement or is a member of a union. The
Company believes that its relationship with its employees is satisfactory.

Item 2. PROPERTIES AND FACILITIES

The Company's maintains its corporate headquarters office at the 79th Floor
of the World Trade Center, New York, NY. This office accommodates the Company's
full time corporate and administrative personnel. The lease on this facility is
month to month with a monthly rent of $2,300.

Item 3. LEGAL PROCEEDINGS

The Company is not currently involved in any legal proceeding that could
have a material adverse effect on the results of operations or the financial
condition of the Company. From time to time, the Company may become a party to
litigation incidental to its business. There can be no assurance that any future
legal proceedings will not have a material adverse affect on the Company.

Nonetheless, as described in the Item 1, above, as of January 31, 2000,
shortly after the resignation of its prior management, the Company owed
approximately $4,523,000 to various creditors. As of April 30, 2000, none of the
aforementioned obligations have resulted in any legal proceeding that could have
a material adverse effect on the results of operations or the financial
condition of the Company. Nonetheless, while the Company is actively pursuing
adequate resolution and satisfaction of these obligations, the failure to reach
an adequate resolution with these creditors may result in litigation that could
have a material adverse effect on the results of operations or the financial
condition of the Company and/or may force the Company to seek legal protection
from its creditors under United States Bankruptcy Code.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II.

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

Market For Securities

The Company's Class A Common Stock, par value $0.01 has been quoted on the
Over the Counter Bulletin Board since March 16, 1999. The Company's Class B
Common Stock, par value $0.01 per share ("Class B Common Stock") has no public
trading market. The following table sets forth the high and low sale price of
the Common Stock on a quarterly basis, as reported by Nasdaq:

<PAGE>
Quarter ended: High Price * Low Price *

April 30, 1999 (commencing March 19, 1999) 7.250 5.750
July 31, 1999 10.625 6.000
October 31, 1999 11.906 10.312
January 31, 2000 14.562 9.000

* Over the counter market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission, and may not
represent actual transactions.

As of April 30, 1999 there were approximately 127 holders of record of
Class A Common Stock and no holders of record of Class B Common Stock. The
Company has not paid dividends on its shares of Common Stock outstanding in the
past. There are no restrictions that limit the ability of the Company to pay
dividends or are likely to do so in the future.

Recent Sales of Unregistered Securities

On October 7, 1998, the Company amended its certificate of
incorporation to create two classes of Common Stock. References to Common Stock
below are to the Common Stock of the Company prior to this Amendment.

The following information is furnished with regard to all securities
sold by the Company within the past three years which were not registered under
the Securities Act. The share numbers set forth below have been adjusted to
reflect a number of stock splits. 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 number
of authorized shares to 8,100,000 and simultaneously effected a 3-for-1 reverse
stock split.

The issuances described in this Item 5 were made in reliance upon the
exemption from registration set forth in Section 4(2) of the Securities Act
relating to sales by an issuer not involving any public offering. None of the
foregoing transactions involved a distribution or public offering. The
recipients of all of these securities represented that such securities were
being acquired for investment and not with a view to the distribution thereof.
In addition, the certificates evidencing these securities bear restrictive
legends. All investors represented that they were either sophisticated or
accredited investors. All investors were given full disclosure concerning the
Company and its business as well as a full opportunity to ask questions of and
receive answers from the Company and its officers and authorized representatives
regarding the terms and conditions of the offering as well as the affairs of the
Company and related matters.

<PAGE>
The following is a list of issuances made in reliance of the aforementioned
exemption from registration, prior to January 31, 1999:

<TABLE>
<CAPTION>
Name Number of Shares Purchase Price Date Sold

<S> <C> <C> <C>
Paul Berger 1,204,800 588,660 February 27,1997
Jim Dodrill 4,833 10,150 April 22,1997
David Staudinger 6,666 14,000 July 25, 1997
Walter Maupay 16,666 35,000 July 31, 1997
Walter & Gina McDonough 3,333 7,000 August 1, 1997
DDJ Hackworthy Ltd Pp 47,619 100,000 August 11, 1997
David Stern 8,333 17,500 August 18, 1997
Ian Woosnam (1) 104,784 220,047 October 1, 1997
Synergy Group International (2) 200,000 100,000 October 17, 1997
Carol Dodrill/Bill Powell (3) 100,000 50,000 October 28, 1997
Paul Fairchild 33,333 70,000 October 30, 1997
Rodger Berman (2) 6,666 5,000 November 10, 1997
Frank Maddocks 60,000 45,000 November 11, 1997
Glen Day 10,000 (4) January 1, 1998
Dan Snider 1,250 (4) January 1, 1998
Arthur Chou 1,666 (4) January 1, 1998
Andrew Holder/Marc Roberts (2) 100,000 100,000 January 23, 1998
Argent Securities, Inc. 125,000 (4) January 23,1998
Total................................. 2,034,949
</TABLE>

(1) Purchase price was paid by the individual forgoing payments due under a
contract with Company in amounts equal to the purchase price.

(2) These individuals purchased stock from Paul Berger and Jim Dodrill, the
Company's former President and Secretary.

(3) These individuals purchased stock from Paul Berger.

(4) Issued in connection with a services contract.

In addition, on May 1, 2000, the Company completed a private placement of
192,513 Class A Common Stock to eighteen individuals, at a price of $6.67 per
share. The Company's gross proceeds from the offering were approximately
$1,284,062. Net proceeds to the Company from this offering were approximately
$1,106,160. Mae Davis Group, Inc. acted as placement agent for the offering and
received approximately $128,401in commissions for its services.

Debt Securities and Warrants

From February, 1997 through July 1, 1998, the Company issued unregistered
debt securities and warrants to a number of individuals pursuant to five private
placements and to Stanley Berger in connection with certain advances to the
Company. The issuances made in connection with these transactions were made in
reliance on Section 4(2) of the Securities Act. In each case, each purchaser was
an accredited investor. The following summary of these transactions reflects the
effect of all stock splits of the Company's Common Stock.

(a) In January through June, 1998, the Company sold through a private
placement a total of 70.1 Units (or portions of a Unit) to 43 individuals (four
of whom had participated in the first private placement), each Unit consisting
of a non-transferable promissory note in the amount of $50,000 and an option to
receive an additional $3,125 in cash or a warrant to purchase 25,000 shares of
the Common Stock of the Company. The warrants are convertible into shares of
Common Stock at $6.90 per share and terminate after three years. The Company
will register the warrants contemporaneously with registration of this Offering.
Argent Securities, Inc. acted as placement agent in the private placement and
received compensation of $499,150 consisting of a 10% commission and certain
other fees.

<PAGE>
(b) On July 1, 1998, the Company, the Company sold through a private
placement a total of one Unit to a single individual, which Unit consisted of a
non-transferable promissory note in the amount of $400,000 and a warrant to
purchase 533,333 shares of the Common Stock of the Company. The warrant is
convertible into shares of Common Stock at $7.50 per share and terminates after
three years. H.J. Meyers acted as placement agent in the private placement and
received compensation of $40,000 consisting of a 10% commission.

Item 6. Management's Discussion and Analysis or Plan of Operation

The following discussion should be read in conjunction with our financial
statements and notes related thereto. This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of certain factors discussed in this annual report.

Overview

In March 2000, the Company set forth to strengthen its financial position
and redefine its business mission. On May 1, 2000, the Company completed a
private placement of approximately $1,284,000 of its common stock to accredited
investors. The proceeds from this private placement are currently being used to
satisfy certain debt, in addition to supplementing the Company's working
capital. While the Company is making every effort to satisfy these obligations,
it may be forced to seek legal protection from its creditors under United States
Bankruptcy Code in the event that these efforts are unsuccessful.

In March 2000, the Company launched its redefined business mission as
an Internet technology and e-commerce incubator. Accordingly, the accompanying
financial statements reflect the results of discontinued operations of the
abandoned golf business for the years ended January 31, 2000 and 1999,
respectively. The Company's new business model provides early stage client
companies with extensive management, marketing, finance and business development
resources in exchange for equity positions in their businesses. In light of this
shift in focus, the Company formed a wholly owned Delaware subsidiary, Fusion
Fund, Inc., which it merged with and into the Company on March 27, 2000, for the
sole purpose of changing its name to Fusion Fund, Inc.

Liquidity and Capital Resources

Our primary source of liquidity has historically consisted of sales of equity
securities and high yield debt. In March 1999, we completed an initial public
offering of our Class A common stock. Through this offering, we sold a total of
$438,500 shares of our Class A common stock. Net proceeds of this offering, were
approximately $1,768,000, inclusive of certain unpaid offering expenses.
Additionally, during the year ended January 31, 2000 we borrowed approximately
$603,000 from two former officers and directors.

<PAGE>
On May 1, 2000 we raised approximately $1,284,000 through the sale common stock
to private investors. We believe that we will need to raise additional funds
from either debt or equity financings in order to achieve our redefined business
mission.

Notwithstanding the funds we raised in the private placement and other
borrowings, we are currently experiencing a severe working capital deficiency
and are incurring significant losses. As of January 31, 2000 our working capital
deficiency was approximately $4,149,000 and for the year ended January 31, 2000
we incurred a net loss of approximately $5,241,000. At this time, we are not
generating any revenues but we are incurring substantial costs and expenses in
connection with the launching of our Internet technology and e-commerce
incubator business.

Results of Operations

Year Ended January 31, 2000 Compared To Year Ended January 31, 1999

The Company incurred a net loss of approximately $5,241,000 during the year
ended January 31, 2000 compared to a net loss of approximately $6,399,000 for
the year ended January 31, 1999.

The Company formally abandoned its golf business in January 2000 and during
March 2000 launched its redefined business mission as an Internet technology and
e-commerce incubator. Accordingly the following discussion reports the results
of discontinued operations of the abandoned golf business.

Selling, general and administrative expenses were approximately $1,381,000 from
non-golf related activities during the year ended January 31, 2000 compared to
none during the year ended January 31, 1999. The Company incurred a loss from
discontinued operations of its abandoned golf business in the amount of
approximately $3,790,000 during the year ended January 31, 2000 compared to a
loss of approximately $5,854,000 during the year ended January 31, 1999.

Interest expense was approximately $70,000 during the year ended January 31,
2000 compared with interest expense of approximately $545,000 during the year
ended January 31, 1999. This reduction of approximately $475,000 was primarily
the result of the conversion of approximately $6,120,000 of debt into equity at
the end of the year ended January 31, 1999.

Year Ended January 31, 1999 Compared To Year Ended January 31, 1998

The Company incurred a net loss of approximately $6,399,000 during the year
ended January 31, 1999 compared to a net loss of approximately $4,694,000 for
the year ended January 31, 1998.

Loss from discontinued operations for the year ended January 31, 1999 was
approximately $5,854,000 compared to approximately $4,449,000 for the year ended
January 31, 1998.

Interest expense was approximately $545,000 for the year ended January 31, 1999
compared to approximately $245,000 for the year ended January 31, 1998. This
increase of approximately $300,000 was primarily the result of increased
borrowings by the Company during the year ended January 31,1999.

<PAGE>
Item 7. FINANCIAL STATEMENTS

The Financial Statements are included with this report commencing on
page F-1.

Item 8. CHANGES IN ACCOUNTANTS AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

(a) Previous independent accountants

(i) On April 5, 1999 PricewaterhouseCoopers LLP resigned as the Company's
independent accountants.

(ii) The reports of PricewaterhouseCoopers LLP on the Company's financial
statements for the past two fiscal years contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to audit scope or
accounting principle; however, the report of PricewaterhouseCoopers LLP dated
June 9, 1998 on the financial statements of the Company as of and for the
periods ended January 31, 1998, contained a paragraph of emphasis indicating the
existence of certain factors which raised substantial doubt about the Company's
ability to continue as a going concern.

(iii) The Company's Board of Directors have been notified of the resignation of
the PricewaterhouseCoopers LLP as the independent accountants of the Company..

(iv) In connection with its audits for the two most recent fiscal years and for
the period from February 1, 1998 through April 5, 1999, there have been no
disagreements with PricewaterhouseCoopers LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements if not resolved to the satisfaction of
PricewaterhouseCoopers LLP, would have caused them to make reference thereto in
their report on the financial statements for such years.

(v) The Registrant has requested that PricewaterhouseCoopers LLP furnish it with
a letter addressed to the SEC stating whether or not it agrees with the above
statements. A copy of such letter, dated April 9, 1999, has been filed as
Exhibit 16 to the Company's Form 8-K filed on April 9, 1999.

(b) New independent accountants:

Effective April 9, 1999, Registrant engaged Wolinetz, Gottlieb & Lafazan,
P.C. as its principal accountant. Such engagement was approved by the
Registrant's Board of Directors. Since the Registrant's engagement of Wolinetz,
Gottlieb & Lafazan, P.C., the Registrant has not consulted Wolinetz, Gottlieb &
Lafazan, P.C., regarding the application of accounting principals to a specified
transaction, the type of audit opinion that might be rendered on Registrant's
financial statements or any matter that was the subject of disagreement or a
reportable event.

PART III

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Directors and Executive Officers

<PAGE>
The following table sets forth certain information concerning the
Directors and Executive Officers of the Company:
<TABLE>
<CAPTION>

Name Age Position

<S> <C> <C>
Adam Goldberg ............................ 35 Chairman of the Board, President, Treasurer
Steven Angel ............................. 23 Director, Secretary, Executive Vice President
Sherri Shapiro ........................... 34 Director
</TABLE>

Adam Goldberg, is the Registrant's President, Director and Chairman. Since
1993, Mr. Goldberg has been engaged in private legal practice, specializing in
real estate, real estate litigation and securities law. Mr. Goldberg intends to
continue his practice in addition to serving in his capacities with the
Registrant. Mr. Goldberg holds a J.D. from Brooklyn Law School as well as a B.A.
from the State University of New York at Buffalo.

Steven Angel, is the Registrant's Secretary and Director. Since 1998, Mr.
Angel was the Vice President of Power Punch Promotions. From 1994 to 1998, Mr.
Angel attended the University of Maryland, where he received a Bachelor of
Science degree in marketing.

Sherri Shapiro, is a Director of the Registrant. Since 1998, Ms. Shapiro
has engaged in the development of several Internet related ventures. From 1994
to 1998, Ms. Shapiro was an associate with Wolff & Samson LLP. From 1991 to
1994, Ms. Shapiro was an associate with Rosenman & Colin LLP. Ms. Shapiro is an
attorney admitted to the bars of the states of New York and New Jersey. Ms.
Shapiro received an A.B. in government from the College of Arts and Sciences at
Cornell University and received a J.D. from Georgetown University Law Center
where she was a member of The Tax Lawyer.

Committees of the Board of Directors

The Board of Directors currently consists of Adam Goldberg, Steven Angel,
and Sherri Shapiro and does not currently have a Compensation Committee or an
Audit Committee. The Company is currently seeking qualified candidates in order
to expand the size of the Board of Directors. Subsequent to such increase, the
Board of Directors intends to establish and form a Compensation Committee and
Audit Committee.

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 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.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to the Company during fiscal year 2000, the Company is not aware of
any director, officer or beneficial owner of more than ten percent of the
Company's Common Stock that, during fiscal year 2000, failed to file on a timely
basis reports required by Section 16(a) of the Securities Exchange Act of 1934.

<PAGE>
Item 10. EXECUTIVE COMPENSATION

The following table sets forth certain information regarding
compensation paid by the Company during each of the last two fiscal years to the
Company's Chief Executive Officer and to each of the Company's executive
officers who earned in excess of $100,000.

<TABLE>
<CAPTION>
Summary Compensation Table

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
Restricted Securities LTIP All Other
Other Stock Underlying Payouts Compen-
Annual Award(s) Options/ ($) sation
Compen- (2) ($)
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS sation (1)
- - ---------------------------------------------------------------------------- ----------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul H. Berger................................. 2000 $ 30,000 --- --- --- --- --- ---
Chairman of the Board and Chief 1999 $ 31,249 --- --- (3) --- --- ---
Executive Officer

Gary M. Treater................................ 2000 $ 12,826 --- --- $12,826 (4) --- --- ---
Executive Vice President 1999 115,434 --- --- --- --- (5) ---

Neal J. Cohen.................................. 2000 $109,100 --- --- $40,963 (6) --- --- ---
Vice President Apparel Operations 1999 101,700 --- --- --- --- (7) ---
</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 $93,751.

(4) Representing value of 2,212 shares of restricted stock, at date of grant,
paid in May 1999, as deffered payment for services previously rendered.

(5) Mr. Treater deferred an additional $25,652.

(6) Representing value of 5,650 shares of restricted stock, at date of grant,
paid in May 1999, as deffered payment for services previously rendered.

(7) Mr. Cohen deferred an additional $33,900.

STOCK OPTIONS GRANTS AND EXERCISES

The Company made no option grants to any named executive officers during
fiscal year ended January 31, 2000:

<PAGE>
The following table shows the value at January 31, 2000 of unexercised
options held by the named executive officers:

Aggregated Option Exercises in Last Fiscal Year
And Fiscal Year-end Option Values
<TABLE>
<CAPTION>

Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Value Options at In-the-Money Options at
On Realized Fiscal Year-end (#) Fiscal Year-end ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/ Unexercisable
- ---- ------------ ---- ------------------------- --------------------------
<S> <C> <C> <C> <C>
Paul H. Berger 19,275 280,675 0 0
- ----------------
</TABLE>

EMPLOYMENT AGREEMENTS

The Company has no material employment agreements.

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 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

<PAGE>
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. No ISOs and non-qualified options to purchase
shares of Class A Common Stock have been granted to employees or consultants of
the Company in the fiscal year 2000.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

Principal Stockholders

The following table sets forth certain information, as of the date hereof,
with respect to the beneficial ownership of the Common Stock by each beneficial
owner of more than 5% of the outstanding shares thereof, by each director, each
nominee to become a director and each executive named in the Summary
Compensation Table and by all executive officers, directors and nominees to
become directors of the Company as a group.
<TABLE>
<CAPTION>

NAME AND ADDRESS
OF BENEFICIAL OWNER,
5% STOCKHOLDER OR BENEFICIAL OWNERSHIP
SELLING STOCKHOLDER NUMBER PERCENT
- - ---------------------------------------------------- -------------------------------------------
<S> <C> <C>
Adam Goldberg....................................................... 5,500 0.09%
Steven Angel........................................................ 10,000 0.17%
Sherri Shapiro...................................................... 0 0.00%
Gary Rogers......................................................... 304,921 5.35%
Paul Berger......................................................... 1,271,724 22.30%
Jim Dodrill......................................................... 473,663 8.30%
All directors and executive officers
of the Company as a group
(3 persons) ....................................................... 15,500 0.26%

</TABLE>
Item 12. CERTAIN TRANSACTIONS

Transactions Involving Affiliates of the Company

From time to time throughout the period covered in this report, the Company
has had no independent directors on its board. During those times, none of the
ongoing transactions, or prior transactions which were closed in those periods,
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 during a period in which it has no independent
directors, 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.

<PAGE>
Transactions involving Paul Berger

Between July 31, 1998, and October 26, 1999, Paul Berger, Chairman of the
Board of Directors and Chief Executive Officer of the Company, made a number of
advances to the Company. On July 31, 1998, Mr. Berger advanced $17,500 to the
Company. Mr. Berger received a note from the Company for the advance 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.

In April 1999, Mr. Berger advanced $250,000 to the Company in exchange for
notes payable bearing interest at the prime rate of interest. $100,000 of this
advance was due on the earlier of March 1, 2000 or within five days following
the closing of a public offering of equity securities of the Company resulting
in gross proceeds to the Company of $5,000,000. The remaining $150,000 of this
advance was due on the earlier of April 20, 2004, or within five days following
the closing of a public offering of equity securities of the Company resulting
in gross proceeds to the Company of $5,000,000. The Company is in default of the
$100,000 payments.

In October 1999, Mr.Berger advanced $170,295 to the Company in exchange for
notes payable bearing interest at the prime rate of interest. These notes were
due on December 1, 1999. The Company is in default of this payment.

Transactions involving Jim Dodrill

In November through January, Jim Dodrill advanced a total of $182,500 to
the Company. The loans were to bear interest at the prime rate of interest. The
Company has not yet repaid these loans.

ENGAGEMENT OF MAE DAVIS GROUP AS PLACEMENT AGENT

In April 2000, the Company engaged Mae Davis Group, Inc. to act as
placement agent for a private placement of 192,513 Class A Common Stock, at a
price of $6.67 per share. The Company's gross proceeds from the offering were
approximately $1,284,062. Mae Davis Group, Inc. received a 10% placement agent's
commission, totaling $128,401, in connection its services in the offering.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
(a) Exhibits

<S> <C>
3.1* Articles of Incorporation of the Registrant(1)
3.2* By-laws of Registrant(1)
4.1* Specimen Common Stock Certificate(3)
10.1* Employment Agreement with William Barthold, dated January 16, 1996
10.2* Employment Agreement with Daniel Snider, dated January 16, 1998
10.3* Business Note and Security Agreement, dated June 19, 1997 with Barnett Bank, N.A.
10.4* Revolving Accounts Receivable Funding Agreement between the Company and Gibraltar Financial
Corporation, dated November 25, 1997

<PAGE>
10.5* Amendment to Revolving Accounts Receivable Funding Agreement dated November 25, 1997
10.6* Gibraltar Financial Corporation Demand Note, dated November 25, 1997
10.7* Form of Promissory Note signed by the Company in favor of
Paul Berger, Jim Dodrill and Stanley Berger for all
advances made by them to the Company 10.8* Security
Agreement with Stanley Berger, dated October 1, 1997 10.9*
Subordination Agreement with Stanley Berger, dated
December 3, 1997
10.10* Option, dated January 24, 1997, received by Paul Berger as consideration for an advance
made by him to the Company
10.11* Option, dated September 5, 1996, received by Jim Dodrill as consideration for an advance
made by him to the Company
10.12* Form of Warrant for the purchase of the Common Stock of the Company received by Stanley
Berger as consideration for advances made by him to the Company
10.13* Form of Promissory Note signed by the Company in favor of
all participants in a private financing between February
4, 1997 and April 30, 1997
10.14* Form of Warrant for the purchase of the Common Stock of
the Company received by all participants in a private
financing between February 4, 1997 and April 30, 1997
10.15* Form of Promissory Note signed by the Company in favor of
all participants in a private financing between May 12,
1997 and June 30, 1997
10.16* Form of Warrant for the purchase of the Common Stock of
the Company received by all participants in a private
financing between May 12, 1997 and June 30, 1997
10.17* Form of Promissory Note signed by the Company in favor of all participants in a private
financing in July, 1997
10.18* Form of Warrant for the purchase of the Common Stock of the Company received by all
participants in a private financing in July, 1997
10.19* Form of Consent to extension of payment for all Notes executed by the Company in all
private financings
10.20* Form of Subscription Agreement signed by all investors in the Company
10.21* Lease Agreement, dated March 13, 1997, between the Company and Sanctuary of Boca, Inc. (for
office space in Boca Raton)
10.22* Amendment to Lease #1, dated August 1, 1997, between the Company and Sanctuary of Boca, Inc.
10.23* Amendment to Lease #2, dated February 2, 1998, between the Company and Sanctuary of Boca,
Inc.
10.24* Sublease Agreement and Rider, dated December 1, 1996,
between the Company and Tom Rochon Associates (for office
space in New York City) and Over-Lease Agreement
incorporated therein
<PAGE>
10.25* Sublease Agreement and Rider, dated July 12, 1996, between
the Company and Tom Rochon Associates (for office space in
New York City) and Over-Lease Agreement incorporated
therein
10.26* Research, Development and Consulting Contract, dated October 8, 1996, with Chou Golf Design
Labs, Inc.
10.27* Contract Amendment, dated may 4, 1997, to Research, Development and Consulting Contract
with Chou Golf Design Labs, Inc.
10.28* Agreement, dated September 1, 1998, with G. Day Associates, Inc.
10.29* 1996 Incentive and Non-qualified Stock Option Plan
10.30* Form of Incentive Stock Option Agreement under 1996 Incentive and Non-qualified Stock
Option Plan
10.31* Form of Non-qualified Stock Option Agreement under 1996 Incentive and Non-qualified Stock
Option Plan
10.32* 1998 Incentive and Non-qualified Stock Option Plan
10.33* Form of Incentive Stock Option Agreement under 1998 Incentive and Non-qualified Stock
Option Plan
10.34* Form of Non-qualified Stock Option Agreement under 1998 Incentive and Non-qualified Stock
Option Plan
10.35* MONY Deferred Compensation Plan for managers of the Company
10.36* Settlement Agreement and Release, dated May 4, 1998 between the Company and Hippo Holdings
Ltd
10.37* Consulting Agreement, dated April 29, 1998 between the Company and Argent Securities. Inc.
10.38* Form of Non-qualified Stock Option Agreement for Outside Directors under 1998 Incentive and
Non-qualified Stock Option Plan
10.39* Termination Agreement, dated September 1, 1998 between the Company and Daniel Snider
10.41* Form of Exchange Agreement
10.42*** Form of Consulting Agreement between the Company and Gary A. Rogers, dated July 1, 1999
10.43*** Form of Consulting Agreement between the Company and Gary A. Rogers, dated February 1, 2000
10.44*** Form of Consulting Agreement between the Company and Consulting Agreement between the
Company and Sobel Consulting Services, LLC, dated February 2, 2000
10.44*** Form of promissory note between the Company and Paul Berger, dated April 22, 1999
10.45*** Form of promissory note between the Company and Paul Berger, dated October 26, 1999
16.1* Letter on Change in Certifying Accountants
27** Financial Data Schedule
</TABLE>

----------------
* Previously filed.
** Filed herewith.
*** To be filed by amendment.

(b) Reports on Form 8-K.

<PAGE>
The following Reports on Form 8-K were filed during the last quarter of the
period covered by this report, and from that date to the date hereof:

<TABLE>
<CAPTION>
Date Item Reported

<S> <C>
November 24, 1999 Resignation of Paul Berger as Chief Executive Officer.

February 3, 2000 Appointment of new directors and resignation of officers.

March 9, 2000 Resignation of directors and officers and appointment of new directors and officers.

May 11, 2000 Change in Company name from Outlook Sports Technology, Inc. to Fusion Fund, Inc.

</TABLE>

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Fusion Fund, Inc.

By: /s/ Steven Angel
Steven Angel, Secretary

Date May 15, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>

Name Position Date

<S> <C> <C>
/s/ Adam Goldberg Chairman, President, Treasurer May 15, 2000
Adam Goldberg

/s/ Steven Angel Director, Secretary May 15, 2000
Steven Angel

/s/ Sherri Shapiro Director May 15, 2000
Sherri Shapiro
</TABLE>

<PAGE>
FUSION FUND, INC.

(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)

INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

Page

<S> <C>
Report of Independent Accountants F-2

Balance Sheet, January 31, 2000 F-3

Statements of Operations, Years Ended
January 31, 2000 and 1999 F-4

Statements of Changes in Shareholders' Deficit, Years Ended
January 31, 2000 and 1999 F-5

Statements of Cash Flows, Years Ended
January 31, 2000 and 1999 F-7

Notes to Financial Statements F-10

</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Shareholders
Fusion Fund, Inc.
F/K/A Outlook Sports Technology, Inc.

We have audited the accompanying balance sheet of Fusion Fund, Inc. (F/K/A
Outlook Sports Technology, Inc.) as of January 31, 2000, and the related
statements of operations, changes in shareholders' deficit, and cash flows for
the years ended January 31, 2000 and January 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fusion Fund, Inc. (F/K/A
Outlook Sports Technology, Inc.) as of January 31, 2000, and the results of its
operations and its cash flows for the years ended January 31, 2000 and January
31, 1999 in conformity with generally accepted accounting principles.

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 incurred recurring losses and negative
cash flows from operations and has a working deficiency capital and
shareholders' deficit at January 31, 2000. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are described in Note 1. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

WOLINETZ, GOTTLIEB & LAFAZAN, P.C.

Rockville Centre, New York
April 6, 2000

F-2

<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
BALANCE SHEET
JANUARY 31, 2000
<TABLE>
<CAPTION>

ASSETS

Current Assets:
<S> <C>
Cash and cash equivalents ................................... $ 183,629

Accounts receivable (net of allowance for doubtful accounts
of $275,206) .............................................. --
Inventories (net of allowance of $116,000) --
----------
$ 183,629
==========
LIABILITIES AND SHAREHOLDERS' DEFICIT

Current Liabilities:
Accounts payable ............................................ $ 1,678,449
Accrued expenses ............................................ 1,009,400
Accrued wages and related expenses .......................... 729,568
Accrued interest payable .................................... 62,671
Notes payable ............................................... 399,984
Notes payable - stockholders - current portion .............. 452,796
----------
Total current liabilities ............................ 4,332,868

Notes payable - stockholders - long-term ...................... 190,000
----------
4,522,868

Commitments and contingencies

Shareholders' Deficit:
Preferred stock; $.01 par value, 5,000,000 shares authorized,
none issued and outstanding ............................... --
Common stock; Class A, $.01 par value, 15,000,000
shares authorized; 5,178,097 shares issued ................ 51,781
Common stock; Class B, $.01 par value, 5,000,000 shares
authorized; no shares issued and outstanding .............. --
Treasury stock; 175,000 Class A shares at cost .............. (50,550)
Additional paid-in capital .................................. 14,371,584
Accumulated deficit ......................................... (18,712,054)
----------
Total shareholders' deficit .......................... (4,339,239)
----------
$ 183,629
==========

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-3

<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)

STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

Year Ended
January 31,
2000 1999

<S> <C> <C>
Revenues ..................................... $ -- $ --
----------- -----------

Costs and expenses:
Cost of sales .............................. -- --
Selling, general and administrative expenses 1,381,250 --
----------- -----------

Total costs and expenses ............ 1,381,250 --
----------- -----------

Loss from operations ......................... (1,381,250) --
----------- -----------

Other income (expense):
Interest expense ........................... ( 70,470) (544,869)
Interest Income ............................ 143 --
----------- -----------

Total other income (expense) ........ ( 70,327) (544,869)
----------- -----------

Loss before loss from discontinued operations (1,451,577) (544,869)

Discontinued operations:
Loss from operations of abandoned business . (3,789,743) (5,853,662)
----------- -----------

Net loss ..................................... $(5,241,320) $(6,398,531)
=========== ===========

Weighted average common shares outstanding ... 4,283,677 2,739,376
=========== ===========

Net loss per common share - basic:

Operations ................................. $ (.34) $ (.20)
Discontinued operations .................... (.88) (2.14)
----------- -----------
Net loss ................................... $ (1.22) $ (2.34)
=========== ===========
</TABLE>

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

F-4
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
YEARS ENDED JANUARY 31, 1999 AND JANUARY 31, 2000
<TABLE>
<CAPTION>

Additional
Common Stock Treasury Paid in Total
Shares Amount Stock Capital Accumulated Shareholders'
Deficit Deficit

<S> <C> <C> <C> <C> <C> <C> <C>
Balance, February 1, 1998 ............. 2,324,071 $ 23,241 $ -- $ 2,306,543 $(7,072,203) $(4,742,419)

Issuance of common stock
for payment of services ............. 242,700 2,427 -- 411,786 -- 414,213

Issuance of common stock
upon conversion of debt ............. 1,224,257 12,243 -- 6,109,041 -- 6,121,284

Issuance of common stock
as debt issuance expense ............ 8,000 80 -- 39,920 -- 40,000

Issuance of stock purchase warrants
as payment of accrued interest ...... -- -- -- 25,000 -- 25,000

Treasury stock, 50,000 shares ......... -- -- (19,300) -- -- (19,300)

Net loss .............................. -- -- -- -- (6,398,531) (6,398,531)
------------ ------------ ------------ ------------ ------------ ------------
Balance, February 1, 1999 ............. 3,799,028 37,991 (19,300) 8,892,290 (13,470,734) (4,559,753)

Issuance of common stock .............. 53,750 537 -- 214,463 -- 215,000

Stock option compensation ............. -- -- -- 432,248 -- 432,248

Issuance of common stock pursuant
to initial public offering .......... 438,500 4,385 -- 1,763,227 -- 1,767,612

Issuance of common stock as
consideration for accrued liabilities 46,881 469 -- 235,702 -- 236,171

Issuance of common stock for
payment of services ................. 205,319 2,053 -- 1,743,237 -- 1,745,290

Issuance of common stock for payment
of unsecured note payable ........... 65,000 650 -- 730,600 -- 731,250

Issuance of common stock as debt
issuance expense .................... 10,000 100 -- 49,900 -- 50,000

Issuance of stock purchase warrants
as payment of accrued interest ...... -- -- -- 212,813 -- 212,813

Issuance of common stock on exercise
of stock options and warrants ....... 682,435 6,824 (2,040,846) 2,214,022 -- 180,000

Treasury stock, 125,000 shares ........ -- -- (31,250) -- -- (31,250)
Expenses of stock offerings ........... -- -- -- (77,500) -- (77,500)

Retirement of treasury shares ......... (142,816) (1,428) 2,040,846 (2,039,418) -- --

Issuance of common stock in connection
with expenses of stock offering ..... 20,000 200 -- -- -- 200

Net loss .............................. -- -- -- -- (5,241,320) (5,241,320)
------------ ------------ ------------ ------------ ------------ -----------

Balance, January 31, 2000 ............. 5,178,097 $ 51,781 $ (50,550) $ 14,371,584 $(18,712,054) $(4,339,239)
============= ============ ============ ============ ============ ===========
</TABLE>

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

F-5
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

Year Ended
January 31,
2000 1999
Operating activities:

<S> <C> <C>
Loss from continuing operations .............................................. $(1,451,577) $ (544,869)
----------- ----------
Adjustments to reconcile loss from continuing operations to net cash used in
operating activities:

Depreciation and amortization ............................................ 147,821 167,400

Stock issued for services and to vendors ................................. 1,745,290 414,213

Stock based compensation ................................................. 432,248 --
Stock issued as debt issuance expense .................................... 481,250 --
Write-down of property and equipment ..................................... 232,430 --
Write-down of inventories ................................................ 168,394 --
Increase in allowances for doubtful accounts and
sales returns and allowances ........................................... 127,602 112,605

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable ............................. (127,602) 55,095

Decrease in inventories ................................................ 57,410 191,254

(Increase) decrease in prepaid expenses ................................ 33,747 (20,893)

Decrease in deposits and other current assets .......................... -- 51,813

Decrease in prepaid royalties .......................................... -- 133,319

Increase (decrease) in accounts payable and
accrued expenses ..................................................... (686,910) 2,208,785
----------- ----------
Total adjustments ..................................................... 2,611,680 3,313,591
----------- ----------
Loss from discontinued operations ........................................ (3,789,743) (5,853,662)
----------- ----------
Net cash (used) in operating activities ........................................ (2,629,640) (3,084,940)
----------- ----------
Investing activities:
Capital expenditures ......................................................... (3,933) (302,074)
----------- ----------
Net cash (used) in investing activities ........................................ (3,933) (302,074)
----------- ----------
</TABLE>

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

F-6
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
STATEMENTS OF CASH FLOWS
(Continued)

<TABLE>
<CAPTION>
Year Ended
January 31,
2000 1999

Financing activities:
<S> <C> <C>
Net proceeds from (payments to) line of credit ... $ (116) 100

Advances from officers ........................... -- 44,147

Payments of advances from officers ............... (25,000) --
Proceeds from issuance of unsecured notes payable 665,000 4,205,000
Payments to factor ............................... (2,744) (277,394)

Proceeds from issuance of notes payable -
related parties ................................ 602,796 --
Repayment of unsecured notes payable ............. (725,000) (415,500)

Proceeds from sale of common stock pursuant
to initial public offering ..................... 2,543,300 --
Expenses of initial public offering .............. (604,784) --
Proceeds from sale of common stock ............... 395,000 --
Purchase of treasury stock ....................... (31,250) --
Deferred offering costs .......................... -- (170,706)
----------- -----------
Net cash provided by financing activities .......... 2,817,202 3,385,647
----------- -----------
Net increase (decrease) in cash and cash equivalents 183,629 (1,367)

Cash and cash equivalents, beginning of period ..... -- 1,367
----------- -----------
Cash and cash equivalents, end of period ........... $ 183,629 $ --
=========== ===========

Supplemental disclosure of cash flow information:

Cash paid for interest ........................... $ 28,308 $ 9,322
=========== ===========
</TABLE>

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

F-7

<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
STATEMENTS OF CASH FLOWS
(Continued)

Supplemental disclosure of noncash investing and financing activities:
<TABLE>
<CAPTION>

Year Ended
January 31,
2000 1999
<S> <C> <C>
Issuance of 8,000 shares of Class A common stock
as debt issuance expense $ - $ 40,000
================= =============

Return to the Company of 50,000 shares of common
stock as treasury stock originally issued to a licensor
in connection with sale of license back to licensor $ - $ 19,300
================= =============

Issuance of 1,161,666 shares of Class A common stock and 1,161,666 warrants to
purchase Class A common stock in connection with conversion of notes payable
and accrued interest on notes, pursuant to exchange
agreement $ - $ 5,808,327
================= =============

Issuance of 62,591 shares of Class A common stock and 62,591 warrants to
purchase Class A common stock to the Company's President and Chief Executive
Officer in connection with conversion of advances made to the Company and
accrued interest on such advances, pursuant to exchange agreement $ - $ $312,957
================= =============

Issuance of 46,881 shares of Class A common stock as
consideration for accrued liabilities $ 236,171 $ -
================= =============

Issuance of 65,000 shares of Class A common stock for
payment of unsecured note payable $ 300,000 $ -
================= =============

Warrants granted as payment of accrued interest $ 212,813 $ -
================= =============

Expenses of stock offering $ 77,500 $ -
================= =============

Cashless exercise of stock options and warrants $ 2,040,846 $ -
================= =============

</TABLE>

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

F-8
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 1 - Organization and Basis of Presentation

Fusion Fund, Inc. (the "Company") was originally incorporated in the State
of Delaware as Outlook Sports Technology, Inc. on February 8, 1996. Outlook
Sports Technology, Inc. was 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. During March 2000 Outlook Sports Technology, Inc.
formed a wholly owned Delaware subsidiary, Fusion Fund, Inc., which it merged
with and into for the sole purpose of changing its name to Fusion Fund, Inc.

During January 2000 the Outlook Sports Technology, Inc. formally abandoned
the golf business and during March 2000 launched its redefined business mission
as an Internet technology and e-commerce incubator. Accordingly, the
accompanying financial statements reflect the results of discontinued operations
of the abandoned golf business for the years ended January 31, 2000 and 1999,
respectively.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Since its inception in 1996 through
January 31, 2000, the Company has incurred recurring losses of approximately
$18,712,000 and has not generated cash from its operating activities.
Additionally, at January 31, 2000, the Company had a shareholders' deficit of
approximately $4,339,000 and its current liabilities exceeded its current assets
by approximately $4,149,000. These factors, among others, raise substantial
doubt about the Company's ability to continue as a going concern. Continuation
of the Company is dependent on (i) achieving sufficiently profitable operations
and (ii) obtaining adequate financings. These financial statements do not
reflect any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.

The Company has been funding its operations principally through debt and
equity financings. The Company will need to continue to fund its operations in
this manner until it achieves sufficiently profitable operations. The Company
plans to eliminate the going concern uncertainty by (i) raising additional funds
through debt and/or equity financings and (ii) by acquiring equity interests in
companies in connection with its redefined business mission. The achievement
and/or success of these planned measures, however, cannot be determined at this
time.

NOTE 2 - Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
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.

Cash and Cash Equivalents

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

F-9
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 2 - Summary of Significant Accounting Policies (Continued)
------------------------------------------------------

Inventories

Inventories, which is primarily comprised of golf clubs and component
accessories and parts, is stated at the lower of cost or market. Cost is
determined using the first-in, first-out method. Market is determined based on
the net realizable value. Appropriate consideration is given to obsolence,
deterioration and other factors in evaluating net realizable value.

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.

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 the 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 common shares
outstanding during that period. The weighted average number of common shares
outstanding for the years ended January 31, 1999 and 2000 excludes approximately
3,218,000 and 4,240,000 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.

F-10
<PAGE>
FUSION FUND, INC.
(F/K/A/ OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999

NOTE 2 - Summary of Significant Accounting Policies (Continued)
------------------------------------------------------

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.

Reclassifications

Certain items in these financial statements have been reclassified to
conform to the current period presentation.

NOTE 3 - Notes Payable

Notes payable consist of the following:

<TABLE>
<CAPTION>
<S> <C>
Unsecured notes payable to private investors,
due September 1998 (see below) $ 325,000
Unsecured notes payable, interest at 10.5%,
due December 1999 40,000
Unsecured line of credit, interest at the bank's
prime rate plus 2%, guaranteed by the
Company's former President and Chief Executive
Officer, due on demand 34,984
--------------
$ 399,984
</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. From February 1998 through
June 1998 the Company raised an additional $3,455,000 through the issuance of
notes payable, the terms of which were the same as the January 1998 note. Under
the terms of the debt financing, for each $50,000 principal the holder of the
note payable had 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 then planned initial public offering, which management expected to
be 115% of the per share initial public offering price.

In November 1998, noteholders of $3,530,000 principal of the $3,905,000
principal described above elected to exchange such indebtedness for an aggregate
of 706,000 shares of the Company's Class A common stock and 706,000 warrants to
purchase Class A common stock (see Note 6). At January 31, 2000 the Company was
in default on the remaining $325,000 notes payable.

F-11
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 4 - Notes Payable - Stockholders
----------------------------

Notes payable to stockholders consist of the following:

<TABLE>
<CAPTION>
<S> <C> <C>
Unsecured notes and loans payable to the Company's former
President and Chief Executive Officer, due
December 1999, interest at prime rate $ 352,796
Long-term unsecured notes payable to the
Company's former Chief Executive Officer, due
April 2004, interest at prime rate 150,000
Long-term unsecured notes payable to the Company's former
Chief Executive Officer, due March 2000, interest at
prime rate 100,000
Long-term unsecured notes payable to the
Company's former President and Chief Executive
Officer, interest at 7.5%, due by September 2002 40,000
--------------
642,796

Current portion 452,796
--------------
Long-term portion $ 190,000
==============
</TABLE>

In April 1999 the Company's former Chief Executive Officer advanced
$250,000 to the Company in exchange for notes payable bearing interest at the
prime rate of interest. The first $100,000 of this advance is due on the earlier
of March 1, 2000 or within five days following the closing of a public offering
of equity securities of the Company resulting in gross proceeds to the Company
of $5,000,000. The remaining $150,000 of this advance is due on the earlier of
April 20, 2004 or within five days following the closing of a public offering of
equity securities of the Company resulting in gross proceeds to the Company of
$5,000,000.

NOTE 5 - Shareholders' Deficit

Authorized Capital

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.

Common Stock

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 was then negotiating an
endorsement contract with this professional golfer for the Company's TEGRA(TM)
brand products. These negotiations ceased prior to any agreement being reached
between the Company and the golfer.

On April 29, 1998, the Company entered into a consulting agreement with a
financial advisor to obtain financial investment services through January 22,
2000. The consideration provided for in the agreement was the issuance of
125,000 shares of the Company's common stock. This agreement was terminated by
the Company in November 1998. Accordingly, the Company recorded $125,000 as a
charge to operations in the current period.

F-12

<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 5 - Shareholders' Deficit (Continued)

Common Stock (Continued)

In March 1998 the Company issued 12,916 shares of Class A common stock
valued at $69,166 to three consultants in connection with services performed.

On October 7, 1998, the Company's former 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. The Class B common stock converts to an equal amount of
Class A common stock upon the earlier of (i) October 31, 2000 or (ii) such time
as the closing price for the Class A common stock shall equal or exceed $8 for a
period of 10 consecutive trading days. 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 including a related party, whereby such parties exchanged an
aggregate of $5,808,327 of principal and interest on notes for 1,161,666 Class A
shares of common stock and 1,161,666 warrants to acquire Class A shares of
common stock. Subsequent to such exchange, the Company was in default on
$375,000 principal notes payable.

Additionally, in November 1998 the Company executed exchange agreements
with the Company's President and Chief Executive Officer who had advanced funds
to the Company, whereby such officers exchanged an aggregate of $312,957 of
principal and interest on advances for 62,591 Class A shares of common stock and
62,591 warrants to acquire Class A shares of common stock.

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. As of January 31, 2000, the entire 125,000 shares have been purchased
as treasury stock.

During March and April 1999 the Company completed an initial public
offering of its Class A common stock. The Company sold 438,500 shares of Class A
common stock at $5.80 per share. Net proceeds to the Company were approximately
$1,768,000 inclusive of certain unpaid offering expenses. In connection with the
offering, the Underwriters were granted for a nominal fee Common Stock Purchase
Warrants entitling the Underwriters to purchase up to 40,000 shares of Class A
common stock at $9.57 per share.

In June 1999 the Class B common stock was automatically exchanged into
shares of Class A common stock in accordance with the applicable provisions
which call for such conversion to take place at such time as the closing price
of the Class A common stock shall equal or exceed $8.00 for a period of ten
consecutive trading days.

On July 1, 1999 the Company entered into a five year consulting agreement
for management and financial advisory services. The agreement calls for the
issuance of 162,500 shares of the Company's common stock. Accordingly, the
Company recognized a charge of $1,381,250 in the current period as complete
payment for the five year period.

F-13
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 5 - Shareholders' Deficit (Continued)

Common Stock (Continued)

In October 1999 the Company issued 65,000 shares of common stock as
consideration for payment of $300,000 principal note payable. In connection with
this transaction, the Company recorded a charge of $431,250 to operations.

In January 2000 the Company issued 26,987 shares of common stock in
connection with the exercise of common stock purchase warrants and the Company
received proceeds of $180,000.

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>

Warrants
------------------------------

Weighted Average
Shares Exercise Price

<S> <C> <C> <C> <C>
Balance, January 31, 1998 ..................... 464,150 $ 1.12

Warrants issued in connection with extension of
$975,000 of notes payable at 12.5% .......... 26,813 0.75

Warrants issued in connection with extension of
$525,000 of notes payable at 15% ............ 58,188 0.75

Warrants issued in connection with extension of
$420,000 of notes payable at 12.5% .......... 130,000 2.78

Warrants issued in connection with $400,000 of
note payable ................................ 533,333 7.25

Warrants issued in connection with exchange of
$6,121,284 principal and interest (see above) 1,224,257 6.67
--------- ------
Balance, January 31, 1999 ..................... 2,436,741 5.32

Warrants issued in connection with interest on
$3,505,000 principal debt financing ......... 1,752,500 6.67

Warrants exercised ............................ (93,016) (6.45)
--------- ------
Balance, January 31, 2000 ..................... 4,096,225 $ 5.87
========== =======

</TABLE>

F-14
<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 5 - Shareholders' Deficit (Continued)

Common Stock Options (Continued)

On September 4, 1996, the Company adopted the 1996 Incentive and
Non-Qualified Stock Option Plan (the "1996 Plan") allowing the Company to issue
500,000 incentive stock options to employees and non-qualified stock options to
either employees or consultants. The total number of shares with respect to
which options may be granted was increased to 1.15 million on January 24, 1997.

In June 1998 the Company adopted the 1998 Incentive and Non-Qualified Stock
Option Plan (the "1998 Plan") allowing the Company to issue 800,000 incentive
stock options to employees and non-qualified stock options to either employees
or consultants.

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:

Options
----------------------------

Weighted Average
Shares Exercise Price

Balance, January 31, 1998 716,411 $ 2.21
Terminated .............. (101,765) (3.05)
Granted ................. 166,666 8.24
--------- -------

Balance, January 31, 1999 781,312 3.383
Exercised ............... (589,419) (2.75)
Cancelled ............... (175,061) (2.21)
--------- -------

Balance, January 31, 2000 16,832 $ 1.45
========= =======
<TABLE>
<CAPTION>

Outstanding Exercisable Weighted Average
Exercise Price Range Shares Shares Exercise Price

<S> <C> <C> <C> <C>
$0.225 7,166 7,166 $ 0.225
0.72 6,166 6,166 0.720
6.00 3,000 2,500 6.000
--------- ---------- -------
16,832 16,332 $ 1.310
========= ========== =======

</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.

Fair market value information for the Company's stock warrants and options
for the year ended January 31, 1999 and 2000 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.

F-15

<PAGE>
FUSION FUND, INC.
(F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000

NOTE 6 - 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. As of January 31,
2000 the Company had a net operating loss carryforward ("NOLC") for federal
income tax purposes of approximately $15,642,000. This NOLC is available to
offset future federal taxable income, if any, through 2015. 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.

The Company had deferred tax assets of approximately $6,570,000 at January
31, 2000, resulting primarily from net operating loss carryforwards. The
deferred tax assets have been fully offset by a valuation allowance resulting
from the uncertainty surrounding the future realization of the net operating
loss carryforwards.

NOTE 7 - Commitments and Contingencies

The Company currently rents office space on a month to month basis and
leases equipment under non cancelable operating lease arrangements. Rent expense
for the years ended January 31, 1999 and 2000 was approximately $133,000 and
$55,000, respectively.

The Company is involved in legal proceedings and claims which arise in the
ordinary course of its business. Management believes that the outcome of such
litigation and claims will not result in any material adverse effect on the
Company's financial position or results of operations.

NOTE 8 - Subsequent Events

Effective February 1, 2000 the Company entered into a one year consulting
agreement. As provided for in consulting agreement, the consultant is to be paid
compensation of 162,500 shares of the Company's common stock, such shares to be
registered using Form S-8

F-16

<ARTICLE> 5

<LEGEND>
This schedule contains summary financial information extracted from
financial statements as at January 31, 2000 and is qualified in its entirety by
reference to such financial statements.

</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> jan-31-2000
<PERIOD-END> jan-31-2000
<CASH> 183,629
<SECURITIES> 0
<RECEIVABLES> 275,206
<ALLOWANCES> 275,206
<INVENTORY> 0
<CURRENT-ASSETS> 183,629
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 183,629
<CURRENT-LIABILITIES> 4,332,868
<BONDS> 190,000
0
0
<COMMON> 51,781
<OTHER-SE> (4,391,020)
<TOTAL-LIABILITY-AND-EQUITY> 183,629
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,381,250
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,327
<INCOME-PRETAX> (1,451,577)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,451,577)
<DISCONTINUED> (3,789,743)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,241,320)
<EPS-BASIC> (1.22)
<EPS-DILUTED> 0

</TABLE>