TOTAL SPORTS INC, S-1, 1999-11-12

TOTAL SPORTS INC
S-1, 1999-11-12

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<PAGE>

As filed with the Securities and Exchange Commission on November 12, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
TOTAL SPORTS INC.
(Exact name of registrant as specified in its charter)
Delaware 7375 56-2088015
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
234 Fayetteville Street
Raleigh, North Carolina 27601
(919) 573-8020
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Frank A. Daniels, III
Chairman and Chief Executive Officer
Total Sports Inc.
234 Fayetteville Street
Raleigh, North Carolina 27601
(919) 573-8020
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Please send copies to:
Larry E. Robbins, Esq. Gerald S. Tanenbaum, Esq.
Donald R. Reynolds, Esq. Cahill Gordon & Reindel
Wyrick Robbins Yates & Ponton LLP 80 Pine Street
4101 Lake Boone Trail, Suite 300 New York, New York 10005
Raleigh, North Carolina 27607 (212) 701-3000
(919) 781-4000 Fax (212) 269-5420
Fax (919) 781-4865
---------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

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

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

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

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

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]

CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Each Class of Securities Proposed Maximum Aggregate Amount of
to be Registered Offering Price(2) Registration Fee(3)
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<S> <C> <C>
Common Stock, no par value(1).......... $57,500,000 $15,985
</TABLE>

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(1) In accordance with Rule 457(o) under the Securities Act of 1933, as
amended, the number of shares being registered and the proposed maximum
offering price per share are not included in this table.
(2) Estimated solely for purposes of calculating the registration fee.
(3) Calculated pursuant to Rule 457(a) based on an estimate of the maximum
aggregate offering price.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Prospectus
Subject to Completion
Dated November 12, 1999

[LOGO OF TOTAL SPORTS](TM)

Common Stock

Total Sports Inc. is offering shares of its common stock. This is our
initial public offering. We estimate that the initial public offering price
will be between $ and $ per share.

We intend to apply to have the shares of common stock listed on the Nasdaq
National Market under the symbol "TSPT."

Investing in our common stock involves risks. See "Risk Factors" beginning on
page 5.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.

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<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discount Total Sports
- ---------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- ---------------------------------------------
Total $ $ $
- ---------------------------------------------
</TABLE>

We have agreed to grant the underwriters a 30-day option to purchase up to an
additional shares of common stock to cover over-allotments.

J.P. Morgan & Co. Hambrecht & Quist

Allen & Company Incorporated U.S. Bancorp Piper Jaffray

, 2000
<PAGE>

You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that con-
tained in this prospectus. This prospectus is an offer to sell, or a solicita-
tion of offers to buy, shares of common stock only in jurisdictions where of-
fers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of de-
livery of this prospectus or of any sale of our common stock. In this prospec-
tus, "the Company," " Total Sports," "we," "us" and "our" refer to Total Sports
Inc.

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary.................. 1
Risk Factors........................ 5
Forward-Looking Statements.......... 14
Use of Proceeds..................... 15
Dividend Policy..................... 15
Capitalization...................... 16
Dilution............................ 18
Selected Financial Data............. 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 20
</TABLE>

<TABLE>
<CAPTION>
Page
<S> <C>
Business.............................................................. 34
Management............................................................ 47
Certain Transactions.................................................. 54
Principal Stockholders................................................ 58
Description of Capital Stock.......................................... 61
Shares Eligible for Future Sale....................................... 64
Underwriting.......................................................... 65
Legal Matters......................................................... 68
Experts............................................................... 68
Where You Can Find More Information................................... 68
Index to Financial Statements......................................... F-1
</TABLE>

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

Until , 2000, all dealers that buy, sell or trade the common stock, whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

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

We own or have rights to various trademarks and trade names used in our busi-
ness. These include Total Sports SM, TotalCast(TM), Total Baseball(R), Powered
by Total Sports SM, Total College Sports Network SM, Total Hockey(TM), Total
Football(R) and our logo. This prospectus also includes trademarks, service
marks and trade names owned by other companies.
<PAGE>

Prospectus Summary

You should read the following summary together with the more detailed informa-
tion and our financial statements and notes appearing elsewhere in this pro-
spectus before you decide to purchase our common stock.

Except as otherwise indicated, the share information in this prospectus assumes
that the underwriters do not exercise the option granted by us to purchase ad-
ditional shares in this offering to cover over-allotments and assumes, upon
consummation of this offering, the redemption or conversion of all of our pre-
ferred stock and the exercise of warrants to purchase common stock which will
expire if not exercised prior to the consummation of this offering.

Total Sports Inc.

We use our proprietary technology infrastructure and business processes, which
we call our business architecture, to collect sports statistics and information
once and disseminate this content in customized formats through multiple
distribution channels. For example, we use this architecture to deliver our
content to over 250 other Web sites through our syndication partners.

In addition to a unique and compelling user experience, our Total Sports net-
works provide advertisers and merchants with online sponsorship and e-commerce
opportunities associated with specific sports, leagues, teams and events. We
also publish sports encyclopedias, fan guides and other sports-related books,
which further establishes us as a sports authority.

Our market opportunity. The sports market is large and has created significant
opportunities, including the following:

. Spectator sporting events, the sale of sporting goods and the sale of sports
publications in the United States generated approximately $130 billion of
revenue in 1995, according to the Georgia Institute of Technology.

. Approximately $4.8 billion was spent in 1998 on sports-related television
advertising, according to Paul Kagan & Associates.

. Based on research conducted by Sponsorship Research International, we
estimate that in 1998, $13.2 billion was invested globally in sports through
the sponsorship of events, federations, teams, individuals and stadiums.

The popularity of sports and the growth of the online sports market has created
significant opportunities to generate revenue from advertising, live event
sponsorship and sports-related e-commerce. Sports-related Web sites are the
third most visited category on the Internet, and over 75% of all Internet users
have visited sports-related sites, averaging approximately 1.7 visits a day,
according to Harris Black International. The total number of Web users world-
wide will increase from approximately 196 million in 1999 to 502 million by
2003, according to International Data Corporation.

Our solution. While several online providers have emerged in the sports catego-
ry, we believe their presentation of programming and related information tends
to follow the traditional media model of repackaging existing con-

1
<PAGE>

tent into a digital format. We believe that our solutions offer substantial
benefits to our users, partners, sponsors, advertisers and merchants. For exam-
ple:

. Our graphical and textual presentation of live sporting events allows our
users to experience interactive play-by-play, real-time coverage over the
Internet while simultaneously receiving extensive and authoritative statis-
tical analysis and information.

. We supply our partners, who include online news and entertainment companies,
broadcasters, leagues, athletic conferences and teams, with compelling real-
time, event-centered sports coverage, attractive e-commerce and advertising
opportunities, and outsourced sports content solutions while maintaining
their brand integrity.

. We provide our sponsors, advertisers and merchants with a large and attrac-
tive user base, highly targeted sales channels and event-centered solutions.

We have strategic relationships with NBC Sports, the NCAA, Major League Base-
ball and Sports Illustrated, among others. We have also been able to attract
sponsors and advertisers such as American Express, Compaq, General Motors and
GTE. Our number of page views have increased from approximately 38 million in
1997 to approximately 515 million in the first nine months of 1999, while the
number of our sponsors and advertisers has grown from two in 1997 to 55 in the
first nine months of 1999.

Our strategy. Our objective is to become the leading global sports new media
company with a focus on real-time live event coverage. To achieve our objec-
tive, we plan to:

. enhance and further monetize our content;

. strengthen our brand recognition;

. capitalize on our technology expertise;

. expand strategic relationships; and

. grow through acquisitions.

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

We were incorporated in North Carolina in February 1997 and reincorporated in
Delaware in June 1998. Our principal executive office is located at 234 Fay-
etteville Street, Raleigh, North Carolina 27601, and our telephone number at
that location is (919) 573-8020. Our primary Web sites are located at
www.totalsports.com and www.totalsports.net. Information on our Web sites is
not part of this prospectus.

2
<PAGE>

The Offering

<TABLE>
<S> <C>
Common Stock Offered......................... shares

Common Stock Outstanding after the Offering.. shares

Over-Allotment Option........................ shares

Use of Proceeds.............................. We intend to use the net proceeds we receive from
this offering for expansion of our marketing efforts
and technology infrastructure, strategic acquisitions
and general corporate purposes, including working
capital.

Proposed Nasdaq National Market Symbol "TSPT"
</TABLE>

The outstanding share information set forth above is based on the number of
shares of our common stock outstanding on November 12, 1999 and includes a to-
tal of shares of common stock which will be issued upon the consumma-
tion of this offering as a result of the conversion of all outstanding shares
of our Series B preferred stock, Series C preferred stock, Series C1 preferred
stock, Series D preferred stock and Series E preferred stock, and 117,783
shares of common stock issued upon the assumed exercise of outstanding warrants
that will expire if not exercised prior to the consummation of this offering.
The outstanding share information also includes shares of common stock issuable
to holders of Series D preferred stock and to NBC Sports upon consummation of
this offering if the per share offering price is less than $33.18 with respect
to holders of our Series D preferred stock and $32.11 with respect to our com-
mon stock issued to NBC Sports. Based upon a per share offering price of $
(the midpoint of the range shown on the cover page of this prospectus), we
would issue an additional shares of common stock to holders of Series D
preferred stock and an additional shares of common stock to NBC Sports. See
"Business--Strategic Relationships" and "Certain Transactions" for a descrip-
tion of our relationship with NBC Sports, including the provisions requiring
the additional issuance of these shares. At the time of the consummation of
this offering, we will redeem all of our outstanding shares of Series A pre-
ferred stock.

The outstanding share information set forth above excludes:

. 395,027 shares of common stock issuable upon the exercise of stock options
outstanding under our 1997 stock plan as of November 12, 1999 with a
weighted average exercise price of $8.25 per share;

. an additional 786,684 shares reserved for issuance under our 1997 stock
plan; and

. 1,780,980 shares of common stock issuable upon exercise of outstanding war-
rants (including warrants for Series B preferred stock and Series D1 pre-
ferred stock that will convert into warrants to purchase our common stock
upon consummation of this offering) as of November 12, 1999, with a weighted
average exercise price of $11.12 per share, that are not required to be ex-
ercised in connection with and will not expire upon the consummation of this
offering.

All references to shares in this prospectus do not reflect a for-one stock
split of our common stock which will become effective prior to the consummation
of this offering.

3
<PAGE>

Summary Financial Data

The following tables present summary historical financial data that should be
read together with "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the financial
statements and other financial data presented elsewhere in this prospectus.

The pro forma amounts shown below reflect the June 4, 1999 acquisition of Long
Distance Technologies, Inc., d/b/a Motortrax as if the acquisition occurred on
January 1, 1998. The pro forma loss per common share and weighted-average share
data shown below reflects, upon completion of this offering, the redemption of
all of our outstanding Series A preferred stock, the conversion into common
stock of all of our outstanding Series B preferred stock, Series C preferred
stock, Series C1 preferred stock, Series D preferred stock and Series E pre-
ferred stock, the conversion of warrants to purchase Series D1 preferred stock
into warrants to purchase common stock and the exercise of warrants to purchase
117,783 shares of common stock that will expire if not exercised prior to the
consummation of this offering. The pro forma as adjusted balance sheet data
shown below reflects, upon completion of this offering, the redemption of all
of our outstanding Series A preferred stock, conversion into common stock of
all of our outstanding Series B preferred stock, Series C preferred stock, Se-
ries C1 preferred stock, Series D preferred stock and Series E preferred stock,
the conversion of warrants to purchase Series D1 preferred stock into warrants
to purchase common stock and exercise of warrants to purchase 117,783 shares of
common stock, as well as the sale of shares of common stock at an assumed
initial public offering price of $ (the midpoint of the range shown on the
cover page of this prospectus) after deducting estimated underwriting discounts
and offering expenses.

-------------------------------------------------
<TABLE>
<CAPTION>
Pro Forma
February 20, Pro Forma Six Months Ended Six Months
1997 to Year Ended Year Ended ---------------------- Ended
December 31, December 31, December 31, June 30, June 30, June 30,
1997 1998 1998 1998 1999 1999
Dollars in thousands, except per share data ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues:
Digital publishing...... $ 738 $ 2,083 $ 2,196 $ 1,076 $ 2,935 $ 2,983
Print publishing........ 257 1,315 1,315 493 1,041 1,040
E-commerce.............. 14 435 435 81 701 701
---------- ---------- -------- ---------- ---------- -------
Total revenues.......... 1,009 3,833 3,946 1,650 4,677 4,724
Cost of Revenues:
Digital publishing...... 1,395 3,567 3,962 1,682 3,786 3,960
Print publishing........ 411 2,375 2,375 685 1,468 1,468
E-commerce.............. 1 332 332 31 543 543
---------- ---------- -------- ---------- ---------- -------
Total cost of revenues.. 1,807 6,274 6,669 2,398 5,797 5,971
---------- ---------- -------- ---------- ---------- -------
Gross loss............... (798) (2,441) (2,723) (748) (1,120) (1,247)
Operating Expenses:
Product development..... 1,467 2,672 2,748 1,101 1,999 2,020
Sales and marketing..... 600 2,744 2,999 796 1,654 1,698
General and
administrative......... 846 2,599 3,135 1,032 1,680 1,836
Amortization............ 32 185 2,347 39 322 1,402
---------- ---------- -------- ---------- ---------- -------
Total operating
expenses............... 2,945 8,200 11,229 2,968 5,655 6,956

Operating loss........... (3,743) (10,641) (13,952) (3,716) (6,775) (8,203)
Other income (expense),
net..................... 43 (523) (522) (364) (140) (138)
---------- ---------- -------- ---------- ---------- -------
Net loss................. $ (3,700) $ (11,164) $(14,474) $ (4,080) $ (6,915) $(8,341)
---------- ---------- -------- ---------- ---------- -------
Dividends on preferred
stock................... (144) (197) -- (98) (97)
---------- ---------- -------- ---------- ---------- -------
Net loss applicable to
common stockholders..... $ (3,844) $ (11,361) $(14,474) $ (4,178) $ (7,012) $(8,341)
========== ========== ======== ========== ========== =======
Historical basic income
(loss) per common
share................... $(3.17) $(7.28) $(3.06) $(3.96)
Historical weighted-
average common shares
outstanding............. 1,214,419 1,560,903 1,367,496 1,770,917
Pro forma basic income
(loss) per common
share...................
Pro forma weighted-
average common shares
outstanding.............
</TABLE>
------------------------------------
<TABLE>
<CAPTION>
As of
December 31, As of June 30, 1999
---------------- --------------------
Pro Forma
1997 1998 Actual As Adjusted
------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end):
Working capital (deficit)........... $(2,763) $(3,726) $(5,664)
Property and equipment, net......... 742 1,307 1,772
Total assets........................ 2,638 5,282 8,953
Line of credit, notes payable and
capital lease obligations.......... 2,414 3,623 5,331
Redeemable Series A preferred
stock.............................. 1,145 1,343 1,440
Stockholders' equity (deficit)...... (2,090) (2,000) (719)
</TABLE>

4
<PAGE>

Risk Factors

You should carefully consider the risks and uncertainties described below and
all of the other information contained in this prospectus before deciding to
purchase shares of our common stock.

Risks Related to Total Sports

We have a limited operating history and may face difficulties encountered by
early stage companies in new and rapidly evolving markets

We have a limited operating history. An investor in our common stock must con-
sider the risks and difficulties frequently encountered by early stage compa-
nies in new and rapidly evolving markets, including our Internet markets. These
risks include our ability to:

. attract a larger audience to our Total Sports networks;

. increase awareness of our brand;

. strengthen user loyalty;

. offer compelling content;

. maintain our current, and develop new, strategic relationships;

. attract a large number of advertisers and sponsors from a variety of indus-
tries;

. respond effectively to competitive pressures;

. continue to develop and upgrade our technology; and

. attract, retain and motivate qualified personnel.

We have a history of losses and expect future losses

We incurred net losses of $3,700,000 in fiscal 1997, $11,164,000 in fiscal 1998
and $6,915,000 for the six months ended June 30, 1999. As of June 30, 1999, we
had an accumulated deficit of $21,923,000. We expect net losses and negative
cash flow from operations to continue for the foreseeable future as we continue
to incur significant operating expenses and make investments to enhance our
products and services. We intend to significantly increase our operating ex-
penses to:

. develop and enhance our technology;

. increase sales and marketing and operations staff expenses;

. fund promotion and advertising expenditures to build brand awareness;

. create, introduce and enhance our current product offerings;

. pursue strategic acquisitions; and

. enter into new strategic partnership agreements domestically and interna-
tionally.

We might never generate sufficient revenues to achieve profitability. Even if
we do achieve profitability, we might not sustain or increase profitability on
a quarterly or annual basis in the future.

Our quarterly revenues and operating results are not indicative of future
performance and are difficult to forecast

Our quarterly operating results might fluctuate significantly in the future as
a result of a variety of factors, many of which are outside our control, such
as:

. the timing and duration of significant sporting events;

. our ability to obtain related rights to cover significant sporting events;

5
<PAGE>

. the popularity of particular sports and teams; and

. disruptions in sports schedules due to weather, labor disputes or other is-
sues.

Our quarterly revenues and operating results are difficult to forecast and our
results, including quarter-to-quarter comparisons of our operating results,
might not be a good indication of our future performance. In some quarters, our
operating results might be below the expectations of public market analysts and
investors. In that case, the price of our common stock might decrease signifi-
cantly.

Seasonal trends might cause volatility in our stock price

We have experienced seasonal trends in our revenues and in our user traffic.
Traffic on our Total Sports networks typically increases substantially around
major sporting events that we TotalCast, such as the NCAA Championship men's
basketball tournament in March, the Major League Baseball World Series in Octo-
ber and the College World Series in June. As a result, revenues are higher in
some quarters. In particular, our revenues and user traffic have historically
been the highest in the first quarter, coinciding with the NCAA basketball
tournament. Seasonality might negatively affect our operating results and might
cause volatility in our stock price.

If we do not provide an effective online advertising environment, our business
will be materially adversely affected

If advertisers perceive the Internet in general, or our Total Sports networks
in particular, to be a limited or ineffective advertising medium, they might be
reluctant to advertise online or on our Total Sports networks. Our business and
financial condition would be materially adversely affected if the Internet ad-
vertising market develops more slowly than we expect or if we do not increase
our advertising and sponsorship revenues. We receive a large percentage of our
advertising revenues in the form of sponsorships, which tend to be event or
season specific and might require up-front expenditures by us to implement. No
standards for advertising and sponsorships have been widely accepted to measure
the effectiveness of advertising on the Internet. Existing advertisers and
sponsors might discontinue or decrease advertising on our Total Sports networks
if widely accepted standards do not emerge or if we are unable to offer adver-
tisers and sponsors effective advertising and sponsorship options.

Advertisers, sponsors and e-commerce marketers might not advertise on our Total
Sports networks or might pay less for advertising on our Total Sports networks
if they do not believe that they can reliably measure the effectiveness of
Internet advertising or the demographics of the users viewing their advertise-
ments. We use both internal measurements and measurements provided to us by
third parties. If these third parties are unable to continue to provide these
services, we could incur additional costs in connection with replacing these
services. In addition, we are implementing additional systems designed to rec-
ord demographic data on our users. If we do not implement these systems suc-
cessfully, we might not be able to accurately record these demographic charac-
teristics to help attract advertisers and sponsors.

The adoption of Internet advertising and sponsorship, particularly by those en-
tities that have historically relied upon traditional media for advertising,
requires the acceptance of a new way of conducting business, exchanging infor-
mation and advertising products and services. Advertisers and sponsors that
have traditionally relied upon other advertising media might be reluctant to
advertise on our Total Sports networks. In addition, different pricing models
are used to sell advertising on the Internet, and it is difficult to predict
which, if any, pricing models for Internet advertising will emerge as the in-
dustry standard. Our revenues could be materially adversely affected if we are
unable to adapt to Internet advertising pricing models if they are adopted.
This uncertainty makes it difficult to project our future advertising and spon-
sorship rates and revenues.

Our business model is unproven and evolving

Our business model has evolved and will continue to evolve as we adapt to a
changing business environment. Our model depends upon our ability to generate
multiple revenue streams by providing content that can be distributed

6
<PAGE>

through a number of different channels. Our business model also depends on con-
tinued acceptance by ourbusiness customers. To be successful, we must, among
other things, develop and market products and services that achieve broad mar-
ket acceptance by our users, partners, sponsors, advertisers and merchants. Our
Total Sports networks might not continue to achieve broad market acceptance.
Accordingly, our business might not be successful, sustain revenue growth or be
profitable.

We cannot predict the size or viability of the sports new media market

The market for our online sports content is rapidly evolving and is character-
ized, among other things, by an increasing number of market entrants. Demand
and market acceptance for recently introduced services is subject to a high
level of uncertainty and risk. Sports fans who are accustomed to passive lis-
tening or viewing sports coverage provided by traditional media might not be
interested in the interactive sports entertainment on our Total Sports net-
works. It is difficult to predict the future growth rate, if any, and size of
this market because the market for online sports content is new and evolving.
The market for our online sports content might not continue to develop. If the
use of online sports content does not continue to grow, our ability to attract
advertisers and sponsors and grow revenues through e-commerce services would be
materially adversely affected.

Our business would be materially adversely affected if we were to lose existing
or fail to gain additional strategic relationships

We have entered into agreements with certain established media entities and
sports governing bodies, such as NBC Sports, Major League Baseball Enterprises,
Inc. and the NCAA (through Host Communications, Inc.), on which a significant
portion of our revenues depend. The terms of these relationships are generally
three to five years, and they provide us with promotion, content and access to
various sporting events and teams. We also rely on syndication and other li-
censing arrangements to drive traffic to our Total Sports networks and distrib-
ute content to our users. Additionally, these strategic relationships provide
us with additional credibility in the marketplace to negotiate sponsorships and
acquire rights to cover additional sports. While these strategic relationships
are contractual, these parties can generally terminate the agreements for con-
tractual breaches. NBC Sports has the right to terminate their agreement with
us upon certain changes in control, without having to pay us any money or re-
turn the Total Sports stock we issued to NBC Sports. In addition, NBC Sports
has the right to pay us cash or return Total Sports stock we issued to NBC
Sports instead of providing us promotion under their agreement. Our strategic
partners might not perform their contractual obligations and we might not be
able to renew the agreements on comparable terms, if at all.

The loss of any of these strategic relationships could impact the promotion of
our Total Sports networks and the breadth of our sports programming and could
affect our ability to acquire additional rights or secure sponsorships. In ad-
dition, our strategic relationships might not provide the anticipated future
revenues. Some of our contractual arrangements place restrictions on relation-
ships with other potential strategic partners. Our business, operating results
and financial condition could be materially adversely affected if we do not es-
tablish additional, and maintain existing, strategic relationships on commer-
cially reasonable terms.

We need to acquire rights to key sporting events and from major sports
organizations, but the cost and competition for these rights could prevent us
from doing so

We need to acquire rights to TotalCast key sporting events to succeed. If we
are unable to acquire these rights, our ability to broaden our programming and
grow our business will be limited. Our limited operating history makes it dif-
ficult to assess our ability to acquire rights in the future. Holders of rights
might not be willing to enter into strategic relationships with us or sell
rights to us at prices we can afford, if at all. We expect the cost of acquir-
ing rights to increase significantly as competition for these rights increases.
We might not be successful in acquiring the rights we need at all or on favora-
ble terms, especially if third parties, such as traditional media companies,
which have significantly greater resources, experience and bargaining leverage
than we do, compete for those rights.

7
<PAGE>

Increased competition could materially adversely affect our business

We compete for users, sponsorship advertising revenue and sports rights with
many other entities, such as:

. entities that provide access to sports-related content and services, many of
which have been established by traditional media companies through Web enti-
ties targeted to sports enthusiasts generally, Web search and retrieval
services and other high traffic Web entities;

. Web entities targeted to enthusiasts of particular college or professional
sports, some of which have the advantage of being the official site for a
given league, team, event or institution;

. vendors of sports information, merchandise, products and services distrib-
uted through other means, including retail stores, mail, facsimile and pri-
vate online bulletin board services; and

. television, radio and other established media entities that broadcast sport-
ing events.

We have and might have in the future business relationships with some of our
competitors, some of whom offer access to our services through their Web sites.
We anticipate that, as the Internet and other interactive distribution systems
converge with traditional television broadcasting and cable, significant compe-
tition might come from the providers of broadband networks, including sports-
oriented cable networks. Some of our existing competitors, as well as a number
of potential new competitors, have longer operating histories, greater name
recognition, larger customer bases and significantly greater financial, techni-
cal and marketing resources than we do. Others might develop technologies and
services that are similar or superior to ours.

We expect that the number of our direct and indirect competitors will increase
in the future and this might adversely affect our business, operating results
and financial condition. Increased competition could result in lower advertis-
ing rates and loss of users, market share and advertising and sponsorship op-
portunities, any of which could materially adversely affect our business, oper-
ating results and financial condition.

We rely on our marketing efforts to grow awareness of, and traffic to, our
Total Sports networks

Our success will depend, in part, on our ability to increase our brand aware-
ness. In order to build brand awareness and increase traffic to our Total
Sports networks, we must succeed in our marketing efforts and provide high-
quality services. Our ability to increase advertising and other revenues will
depend in part on the success of our marketing efforts and our ability to in-
crease the number of users of our Total Sports networks. If our marketing ef-
forts are unsuccessful or if we cannot increase both our brand awareness and
traffic to our Total Sports networks, our business, operating results and fi-
nancial condition would be materially adversely affected.

We might need to raise additional capital to stay in business

We might not achieve positive cash flow from operations and might require addi-
tional infusions of capital to sustain operations and finance growth. This cap-
ital might not be available. We might need to raise additional funds sooner
than we expect if we incur unforeseen capital expenditures or substantial oper-
ating losses. If adequate funds are not available or are not available on ac-
ceptable terms, we might not be able to develop or enhance our services, take
advantage of future opportunities or respond to competitive pressure, which
could materially adversely affect our business, operating results and financial
condition.

In the event we are not able to provide new and enhanced services and features,
we might not be able to increase our user base

We intend to spend a significant amount of time and money developing new and
enhanced content, products and services. Our development efforts might not keep
pace with technological developments, evolving industry standards or competing
sports information providers if our Total Sports networks do not continue to be
user-friendly or do not continue to appeal to our users. Additionally, the lack
of new and enhanced features and services on our Total Sports networks could
impact our ability to form strategic relationships. If we fail to do any of the
above, our business, operating results and financial condition could be materi-
ally adversely affected.

8
<PAGE>

Acquisitions might disrupt or otherwise have a negative impact on our business

We plan to continue to acquire or make investments in complementary businesses,
products and technologies. Future acquisitions are subject to the following
risks:

. acquisitions might cause a disruption in our ongoing business, distract our
management and make it difficult to maintain our standards, controls and
procedures;

. we might not be able to successfully integrate the services, content, prod-
ucts and personnel of any acquisition into our operations;

. we might be required to incur debt or issue debt or equity securities, which
may be dilutive to existing stockholders, to pay for acquisitions;

. we might be required to assume debt or contingent liabilities, amortize
goodwill or other intangibles, or write-off in-process research and develop-
ment and other acquisition-related expenses; and

. we might not derive the intended benefits of any acquisition and we might
lose our entire investment.

Any of the above events could materially adversely affect our business, operat-
ing results and financial condition.

We might experience capacity constraints or system failures that could damage
our business

If our systems cannot be expanded to cope with increased demand or fail to per-
form effectively, we could experience disruptions in service or slower response
times. Either of these could impair our reputation, damage our brand and mate-
rially adversely affect our business, operating results and financial condi-
tion.

Our ability to provide high quality customer service also depends on the effi-
cient and uninterrupted operation of our computer and communications systems.
We have experienced instances of system interruption, which we believe might
continue to occur from time to time. Our systems and operations also are vul-
nerable to damage or interruption from human error, natural disasters, power
loss, telecommunication failures, break-ins, sabotage, computer viruses, inten-
tional acts of vandalism and similar events. We do not have alternative provid-
ers of hosting services that are available at short notice. We are still devel-
oping a formal disaster recovery plan. Any plan we adopt might not be suffi-
cient to contain or limit the effects of any disaster or event similar to those
described above.

We enter into barter transactions that do not generate cash revenue

Revenues from barter transactions represented approximately 17.5% of our reve-
nues in 1998 and 9.7% of our revenues for the six months ended June 30, 1999.
Barter revenues might continue to represent a significant portion of our total
revenues in future periods. Barter transactions do not generate any cash reve-
nues for us. In addition we must make assumptions determining the value of bar-
ter revenues. If our assumptions are wrong, we might have to reduce the amounts
of barter revenues recognized, which could materially adversely affect our
stock price.

We might be subject to legal claims in connection with the content we publish
and distribute

We might be subject to claims for defamation, negligence, copyright or trade-
mark infringement or based on other theories relating to the information we
publish on our Total Sports networks, on the Web sites of our partners or in
our print publications. These types of claims have been brought, sometimes suc-
cessfully, against online services as well as other print publications in the
past. We could also be subject to claims based upon the content that is acces-
sible from our Total Sports networks through links to other Web sites. Our in-
surance might not adequately protect us against these types of claims. Any
claims, with or without merit, could be time-consuming for our technical and
management personnel, result in costly litigation or require us to introduce
new content or trademarks, develop noninfringing technology or enter into roy-
alty or licensing agreements. These royalty or licensing agreements, if re-
quired, might not be available on acceptable terms, if at all. In the event a
claim of infringement is successful and we fail or are unable to introduce new
content, develop noninfringing technology or license the

9
<PAGE>

infringed or similar technology on a timely basis, our business, operating re-
sults and financial condition could be materially adversely affected. Any liti-
gation, whether or not we prevail, could result in substantial costs and diver-
sion of management and other resources, either of which could materially ad-
versely affect our business, operating results and financial condition.

We might fail to protect our intellectual property

We rely primarily on a combination of copyrights, trademarks, trade secret
laws, licensing agreements and restrictions on disclosure to protect our intel-
lectual property. Despite these precautions, a third party might be able to
copy or otherwise obtain and use the content on our Total Sports networks or
our other intellectual property without authorization. Our precautions might
not prevent misappropriation or infringement of our intellectual property.
Failure to protect our intellectual property in a meaningful manner could mate-
rially adversely affect our business, operating results and financial condi-
tion. In addition, we might need to engage in litigation in order to enforce
our intellectual property rights in the future or to determine the validity and
scope of the proprietary rights of others. Any litigation could result in sub-
stantial costs and diversion of management and other resources, either of which
could materially adversely affect our business, operating results and financial
condition.

Rapid growth in our operations could continue to strain our managerial,
operational and financial resources

We continue to experience rapid growth in our operations. As of September 30,
1999, we had a total of 149 full-time employees, compared with 70 full-time em-
ployees on December 31, 1998. We expect that the number of our employees will
continue to increase for the foreseeable future. This rapid growth has placed,
and any additional growth will continue to place, a significant strain on our
managerial, operational and financial resources. As a result, we will need to
continue to improve our operational and financial systems and our managerial
controls and procedures. Our continued growth depends on our ability to manage
and maintain close coordination among our technical, accounting, finance, mar-
keting, sales, editorial and operations personnel. If we are unable to accom-
plish any of these objectives, our business, operating results and financial
condition could be materially adversely affected.

The loss of any of our key personnel or our failure to attract additional
personnel could harm our business

Our future success will depend, in substantial part, on the continued service
of our senior management, particularly Frank A. Daniels, III, our Chairman of
the Board and Chief Executive Officer, and George Schlukbier, our President. We
do not maintain key man life insurance on any of our senior executives, except
George Schlukbier and John Thorn. Our future success will also depend on our
continuing ability to attract, retain and motivate highly qualified technical,
customer support, financial and accounting and managerial personnel. Competi-
tion for these personnel is intense, and we might not be able to retain our key
personnel or to attract, assimilate or retain other highly qualified personnel
in the future. We have from time to time in the past experienced, and we expect
to continue to experience in the future, difficulty in hiring and retaining em-
ployees with appropriate qualifications.

Risks Related to the Internet Industry

We depend on the continued growth in use and efficient operation of the
Internet

The Internet industry is new and rapidly evolving. Our business would be mate-
rially adversely affected if Internet usage does not continue to grow or grows
more slowly than anticipated. Internet usage might be inhibited for a number of
reasons, including:

. inadequate network infrastructure;

. security concerns;

10
<PAGE>

. inconsistent quality of service; and

. lack of availability of cost-effective, high-speed access to the Internet.

Any of these could cause our users to perceive the Internet in general or our
Total Sports networks in particular as unreliable and, therefore, cause them to
use other media to obtain their sports information.

We might not be able to deliver various services if third parties fail to
provide us with reliable software, systems and related services

Our audience depends on Internet service providers, online service providers
and other Web site operators for access to our Total Sports networks. We also
depend on third-party information providers to deliver information and data
feeds to us on a timely basis. Many of them have experienced significant out-
ages in the past and could experience outages, delays and other difficulties
due to system failures unrelated to our systems in the future. Our Total Sports
networks could experience disruptions or interruptions in service due to the
failure or delay in the transmission or receipt of this information, which
could materially adversely affect our business, operating results and financial
condition.

We depend on various domestic and international third parties for delivery of
much of our content, software and systems. Many of these third parties have
limited operating histories, early generation technology and are themselves de-
pendent on reliable delivery from others. Any delays or malfunctions in the
distribution of our content would limit our ability to deliver our programming.
We also depend on Frontier Global Center in Herndon, Virginia to maintain and
provide monitoring on our production servers. Our operations are dependent on
Frontier's ability to protect our production servers against damage from fire,
power loss, flooding, telecommunications failures, vandalism and other mali-
cious acts, and similar unexpected adverse events. If this hosting facility is
disabled or malfunctions, access to our Total Sports networks would be limited
or eliminated. We also depend on third parties in other important areas. For
example, we depend on third-party encryption technology for secure electronic
commerce transactions.

Concerns regarding security of transactions and transmitting confidential
information over the Internet might negatively impact our revenues

We believe that concern regarding the security of confidential information
transmitted over the Internet, such as credit card numbers, prevents many po-
tential customers from engaging in e-commerce transactions. If we do not main-
tain sufficient security features on our Total Sports networks, our revenues
might decline or we might have additional legal exposure.

Our infrastructure is potentially vulnerable to physical or electronic break-
ins, viruses or similar problems. If a person circumvents our security mea-
sures, he or she could misappropriate proprietary information or cause inter-
ruptions in our operations. Security breaches that result in access to confi-
dential information could damage our reputation and expose us to a risk of loss
or liability. We might be required to make significant investments and efforts
to protect against or remedy security breaches. If we do not adequately address
these concerns, our business, operating results and financial condition would
be materially adversely affected.

Our failure to adapt to technological changes might result in our products
becoming obsolete

We compete in a market characterized by rapidly changing technology, evolving
industry standards, frequent new service and product announcements, introduc-
tions and enhancements and changing customer demands. Thus, our success depends
on our ability to adapt to rapidly changing technologies, to adapt our products
to evolving industry standards and to continually improve the performance, fea-
tures, and reliability of our products in response to competitive products in
and shifting demands of the marketplace. In addition, the widespread adoption
of new Internet, networking or telecommunications technologies or other techno-
logical changes could require substantial expenditures to modify our products
or infrastructure. Our failure to adapt to new technology in any of these areas
could materially adversely affect our business, operating results and financial
condition.

11
<PAGE>

Problems relating to the "year 2000 issue" could adversely affect us

Many existing computer programs use only two digits to identify a year. These
programs were designed and developed without addressing the impact of the up-
coming change in the century. If not corrected, many computer software applica-
tions could fail or create erroneous results by, at or beyond the year 2000.
Any failure of our material systems, our vendors' or service providers' mate-
rial systems or the Internet to be year 2000 compliant could have material ad-
verse consequences for us. Potential consequences include difficulties in oper-
ating our Total Sports networks effectively or conducting other fundamental
parts of our business, which could materially adversely affect our financial
reports.

Governmental regulation and legal uncertainties relating to the Internet might
harm our business

The laws governing the Internet remain largely unsettled. It may take years to
determine whether and how existing laws, including those governing intellectual
property, privacy, libel and taxation, apply to the Internet and the electronic
distribution of business information in particular. Legislation could reduce
the growth in the use of the Internet and decrease the acceptance of the
Internet as a communications and commercial medium, which could materially ad-
versely affect our business, operating results and financial condition. As a
result of the burden that the growing popularity and use of the Internet has
placed on the existing telecommunications infrastructure, some local telephone
carriers have petitioned governmental agencies to regulate Internet service
providers and online service providers in a manner similar to long distance
telephone carriers and to impose access fees on Internet service providers and
online service providers. If any of these petitions or the relief that they
seek is granted, the costs of communicating on the Internet could increase sub-
stantially, potentially adversely affecting the growth in the Internet. Fur-
ther, due to the global nature of the Internet, it is possible that, although
transmissions relating to our services originate in the State of North Caroli-
na, governments of other states, the United States or foreign countries might
attempt to regulate our service or levy sales or other taxes on our activities.
In addition, because our content is available over the Internet in multiple
states and foreign countries, these jurisdictions may claim that we are re-
quired to qualify to do business as a foreign corporation in each such juris-
diction. If we fail to comply with the laws of other jurisdictions or to qual-
ify as a foreign corporation in a jurisdiction where we are required to do so,
we might be subject to taxes and penalties and we might not be able to enforce
contracts or do future business in such jurisdictions. Any such new legislation
or regulation, or the application of laws or regulations from jurisdictions
whose laws do not currently apply to our business, could subject us to addi-
tional taxes or penalties.

Risks Related to the Offering

The market price of our shares might experience extreme price and volume
fluctuations

The stock market has, from time to time, experienced extreme price and volume
fluctuations, including fluctuations that are unrelated to the operating per-
formance of the affected companies. The market prices of the securities of
Internet-related companies have been especially volatile. Broad market fluctua-
tions of this type might adversely affect the market price of our common stock.

The market price of our common stock could be subject to significant fluctua-
tions due to a variety of other factors, including:

. public announcements concerning us or our competitors, or the Internet in-
dustry;

. fluctuations in our operating results;

. introductions of new products or services by us or our competitors;

12
<PAGE>

. changes in analysts' earnings and revenues estimates; and

. announcements of technological innovations.

In the past, companies that have experienced volatility in the market price of
their stock have been the target of securities class action litigation. If we
were sued in a securities class action, we could incur substantial costs and
suffer from a diversion of our management's attention and resources, poten-
tially resulting in a material adverse effect on our business, operating re-
sults and financial condition.

Control by executive officers and directors could be exercised against your
best interests

After this offering, our executive officers and directors will beneficially own
or control, collectively, shares of our common stock, representing ap-
proximately % of our voting power. These principal stockholders, if they
were to act together, will be in a position to elect and remove directors and
control the outcome of matters submitted to stockholders for a vote. Addition-
ally, these principal stockholders would be able to influence significantly any
proposed amendment to our certificate of incorporation, merger, sale of assets
or other major corporate transaction or a non-negotiated takeover attempt. Such
concentration of ownership might discourage a potential acquiror from making an
offer to buy our company, which, in turn, could adversely affect the market
price of our common stock.

A third party could be prevented from acquiring your shares of stock at a
premium to the market price because of our anti-takeover provisions

Our certificate of incorporation and bylaws and Delaware law contain provisions
that could make it more difficult for a third party to acquire us, even though
the acquisition might be beneficial to you and our other stockholders.

Management has broad discretion regarding the use of proceeds from this
offering and might use them in ways that you might not deem desirable

Our management will have broad discretion in how we use the net proceeds of
this offering. You must rely on the judgment of management regarding the appli-
cation of the proceeds of this offering. The failure by our management to apply
the net proceeds from this offering effectively could materially adversely af-
fect our business, results of operations and financial condition.

Future sales of shares of our common stock might negatively affect our stock
price

After this offering, our existing securityholders will own % of our out-
standing common stock. A decision by one or more of such persons to sell their
common stock could depress the market price of our common stock.

Investors in this offering will suffer immediate and substantial dilution

You will incur immediate and substantial dilution in net tangible book value
per share of $ per share, based upon an assumed initial public offering
price of $ , the midpoint of the range shown on the cover page of this
prospectus. To the extent outstanding options and warrants to purchase common
stock are exercised, you will incur further dilution.

13
<PAGE>

Forward-Looking Statements

Some of the statements contained in this prospectus that are not historical
facts, including some statements made in the sections of this prospectus
entitled "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business," are statements of future
expectations and other forward-looking statements. You can identify such
statements because they generally use words like "believe," "might," "will,"
"expect," "intend," "plan," "anticipate," "estimate" or "continue" and other
words and terms of similar meaning. These statements are based on management's
current views and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or events to differ
materially from those expressed or implied in those statements.

We do not intend to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.

14
<PAGE>

Use of Proceeds

We will receive net proceeds from this offering of approximately $
million (approximately $ million if the underwriters exercise their
over-allotment option in full), assuming that our common stock is sold at $
per share, the midpoint of the range shown on the cover page of this prospec-
tus, and after deducting underwriting discounts and the estimated expenses of
this offering. We intend to use the net proceeds to expand our marketing ef-
forts to increase user awareness, expand our technology infrastructure, pursue
strategic acquisitions and for general corporate purposes, including working
capital. The precise allocation of funds among these uses will depend on future
technological, regulatory and other developments in or affecting our business,
the competitive climate in which we operate and the emergence of future oppor-
tunities. As part of our expansion strategy, we might also enter into joint
ventures or strategic alliances which we may fund with a portion of the net
proceeds from this offering. The net proceeds will be invested in government
securities and other short-term, investment grade securities until we use them
in our business.

Dividend Policy

We do not intend to pay cash dividends on our common stock in the foreseeable
future. We plan to retain earnings, if any, for use in the operation of our
business and to fund future growth.

15
<PAGE>

Capitalization

The following table summarizes, as of June 30, 1999, (1) our actual
capitalization, (2) our pro forma capitalization which gives effect to the
issuance of Series D preferred stock and warrants to purchase Series D1
preferred stock to investors, the issuance of common stock and Series E
preferred stock to NBC Sports and the conversion of $6,500,000 aggregate
principal amount of notes payable into Series D preferred stock, and (3) our
pro forma as adjusted capitalization which reflects the consummation of this
offering and includes a total of shares of common stock that will be
issued upon the consummation of this offering as a result of the conversion
into common stock of all outstanding shares of our Series B preferred stock,
Series C preferred stock, Series C1 preferred stock, Series D preferred stock
and Series E preferred stock, and 117,783 shares of common stock issued upon
the assumed exercise of outstanding warrants that will expire if not exercised
prior to the consummation of this offering. At the time of consummation of this
offering, we will redeem all outstanding shares of our Series A preferred
stock.

----------------------------
<TABLE>
<CAPTION>
As of June 30, 1999
--------------------------------
Pro Forma
Actual Pro Forma As Adjusted
-------- --------- -----------
<S> <C> <C> <C>
Dollars in thousands
Cash and cash equivalents.................... $ 59 $ 30,195 $
<CAPTION>
======== ========= ===========
<S> <C> <C> <C>
Current maturities of long-term debt and
capital lease obligations................... $ 4,814 $ 814 $
Long-term debt and capital leases
obligations, less current maturities........ 517 517
Series A redeemable preferred stock, $10.00
par value; 125,000 shares authorized, issued
and outstanding actual and pro forma; no
shares authorized, issued and outstanding
pro forma as adjusted (deficit)............. 1,440 1,440
Stockholders' equity:
Series B convertible preferred stock, $4.49
par value; 650,000 shares authorized,
445,263 shares issued and outstanding actual
and pro forma; no shares authorized, issued
and outstanding pro forma as adjusted....... 1,937 1,937
Series C convertible preferred stock, $.001
par value; 1,500,000 shares authorized,
1,418,200 shares issued and outstanding
actual and pro forma; no shares authorized,
issued and outstanding pro forma as
adjusted.................................... 1 1
Series C1 convertible preferred stock, $.001
par value; 800,000 shares authorized,
630,756 shares issued and outstanding actual
and pro forma; no shares authorized, issued
and outstanding pro forma as adjusted....... 1 1
Series D convertible preferred stock, $.001
par value; no shares authorized, issued and
outstanding actual; 3,500,000 shares
authorized, 2,140,955 issued and outstanding
pro forma; no shares authorized, issued and
outstanding pro forma as adjusted........... -- 3
Series D1 convertible preferred stock, $.001
par value; no shares authorized, issued and
outstanding actual; 1,003,617 shares
authorized, no shares issued and outstanding
pro forma; no shares authorized, issued and
outstanding pro forma as adjusted........... -- --
Series E convertible preferred stock, $.001
par value; no shares authorized, issued and
outstanding actual; 811,423 shares
authorized, issued and outstanding pro
forma; no shares authorized, issued and
outstanding pro forma as adjusted........... -- 1
Common stock, $.001 par value; 20,000,000
shares authorized, 2,070,055 shares issued
and outstanding actual; 20,000,000 shares
authorized, 2,820,198 shares issued and
outstanding pro forma; 500,000,000 shares
authorized, shares issued and
outstanding pro forma as adjusted........... 2 3
Additional paid-in capital................... 19,263 64,552
Contribution receivable...................... (11,157)
Deficit...................................... (21,923) (21,923)
<CAPTION>
-------- --------- -----------
<S> <C> <C> <C>
Total stockholders' equity (deficit)......... (719) 34,417
<CAPTION>
-------- --------- -----------
<S> <C> <C> <C>
Total capitalization......................... $ 6,052 $ 36,188 $
<CAPTION>
======== ========= ===========
</TABLE>

16
<PAGE>

The outstanding share information above, pro forma as adjusted, includes shares
of common stock issuable to holders of Series D preferred stock and to NBC
Sports upon consummation of this offering if the per share offering price is
less than $33.18 with respect to holders of Series D preferred stock and $32.11
with respect to common stock issued to NBC Sports. Based upon a per share
offering price of $ (the midpoint of the range shown on the cover page of
this prospectus), the Company would issue an additional shares of common
stock to holders of Series D preferred stock and an additional shares of
common stock to NBC Sports. See "Certain Transactions" for a description of the
provisions requiring the additional issuance of these shares.

The outstanding share information shown above excludes:

. 395,027 shares of common stock issuable upon the exercise of stock options
outstanding under our 1997 stock plan as of November 12, 1999, with a
weighted average exercise price of $8.25 per share;

. 786,684 shares reserved for issuance under our 1997 stock plan; and

. 1,780,980 shares of common stock issuable upon exercise of outstanding war-
rants (including warrants to purchase Series B preferred stock and Series D1
preferred stock that will convert into warrants to purchase our common stock
upon consummation of this offering) as of November 12, 1999, with a weighted
average exercise price of $11.12 per share, that are not required to be ex-
ercised in connection with and will not expire upon the consummation of this
offering.

17
<PAGE>

Dilution

Our pro forma net tangible book value as of June 30, 1999 was $( ), or
$( ) per share and assumes the conversion or redemption of all outstand-
ing shares of preferred stock, the exercise of outstanding warrants described
below and reflects the issuance and sale of shares of common stock in this of-
fering. Net tangible book value per share represents the amount of our total
tangible assets less total liabilities, divided by shares of common stock out-
standing. After giving effect to the issuance and sale of shares of common
stock in this offering (based on an assumed initial public offering price of
$ per share, the midpoint of the range shown on the cover page of this
prospectus, and after deducting estimated underwriting discounts and estimated
offering expenses), our as adjusted net tangible book value as of June 30, 1999
would have been $( ), or $( ) per share. This represents an immedi-
ate increase in net tangible book value of $ per share to our existing
stockholders and an immediate dilution in net tangible book value of $
per share to new investors. Investors participating in this offering will incur
immediate, substantial dilution. The following table illustrates the per share
dilution:

---------------
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $
Pro forma net tangible book value per share as of June 30,
1999...................................................... $
Increase in pro forma net tangible book value per share to
existing stockholders attributable to new investors....... $
--------
Pro forma net tangible book value per share after this
offering.................................................... $
--------
Dilution per share to new investors.......................... $
========
</TABLE>

The following summarizes, as of June 30, 1999, the number of shares of common
stock purchased from us, the total consideration paid to us and the average
price per share paid to us by existing stockholders and by investors purchasing
shares of common stock in this offering, before deducting estimated underwrit-
ing discounts and commissions and estimated offering expenses:

<TABLE>
<CAPTION>
-------------------------------------------------------
Shares Purchased Total Consideration Average
-------------------- -------------------- Price Per
Number Percent Amount Percent Share
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders... % $ % $
New investors........... % $ % $
<CAPTION>
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Total................. % $ %
<CAPTION>
========= ========= ========= =========
</TABLE>

The tables above assume no exercise of stock options outstanding as of November
12, 1999. Options to purchase 395,027 shares of common stock were outstanding
as of November 12, 1999, with a weighted average exercise price of $8.25 per
share. The tables above assume the exercise of other warrants to purchase
117,783 shares of common stock that would expire if not exercised prior to the
consummation of this offering but does not assume exercise of warrants to pur-
chase 1,780,980 shares of common stock with a weighted exercise price of $11.12
per share that will remain outstanding following the consummation of this of-
fering. To the extent these unexercised options and warrants are exercised, in-
vestors in this offering will experience further dilution.

18
<PAGE>

Selected Financial Data

The following table represents selected historical consolidated financial data.
The information for the periods February 20, 1997 through December 31, 1997 and
for the year ended December 31, 1998 has been derived from our audited consoli-
dated financial statements. The financial data for the six months ended
June 30, 1998 and 1999 were derived from our unaudited financial statements and
in the opinion of management, include all adjustments, consisting only of nor-
mal recurring adjustments, necessary for a fair presentation. They are not nec-
essarily indicative of results that may occur for the entire year. The pro
forma information for the periods ending December 31, 1998 and June 30, 1999
give effect to our acquisition of Long Distance Technologies, Inc. on June 4,
1999, as if it had occurred on January 1, 1998. Since this table contains only
selected financial data, you should read "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and our consolidated finan-
cial statements and related notes included elsewhere in this prospective. The
pro forma loss per common share and weighted-average share data reflects, upon
completion of this offering, the redemption of our Series A preferred stock,
the conversion into common stock of Series B preferred stock, Series C pre-
ferred stock, Series C1 preferred stock, Series D preferred stock and Series E
preferred stock, the conversion of warrants to purchase Series D1 preferred
stock into warrants to purchase common stock and exercise of warrants to pur-
chase 117,783 shares of common stock that will expire prior to the consummation
of this offering.

The pro forma as adjusted balance sheet data reflects, upon completion of this
offering, the redemption of our Series A preferred stock, conversion into
common stock of all of our Series B preferred stock, Series C preferred stock,
Series C1 preferred stock, Series D preferred stock and Series E preferred
stock, the conversion of warrants to purchase Series D1 preferred stock into
warrants to purchase common stock and exercise of warrants to purchase 117,783
shares of common stock that will expire prior to the consummation of this
offering as well as the sale of shares of common stock at an assumed
initial public offering price of $ (the midpoint of the range shown on the
cover page of this prospectus) after deducting estimated underwriting
commissions and offering expenses. Diluted earnings per share are not presented
in this table because we had losses for all periods and the assumed conversion
of our convertible preferred stock and outstanding options and warrants would
be antidilutive.

----------------------------------------------
<TABLE>
<CAPTION>
Pro Forma
February 20, Pro Forma Six Months Ended Six Months
1997 to Year Ended Year Ended -------------------- Ended
December 31, December 31, December 31, June 30, June 30, June 30,
1997 1998 1998 1998 1999 1999
------------ ------------ ------------ --------- --------- ----------
Dollars in thousands, except per share data
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues:
Digital publishing...... $ 738 $ 2,083 $ 2,196 $ 1,076 $ 2,935 $ 2,983
Print publishing........ 257 1,315 1,315 493 1,041 1,040
E-commerce.............. 14 435 435 81 701 701
--------- --------- -------- --------- --------- -------
Total revenues.......... 1,009 3,833 3,946 1,650 4,677 4,707
Cost of revenues:
Digital publishing...... 1,395 3,567 3,962 1,682 3,786 3,960
Print publishing........ 411 2,375 2,375 685 1,468 1,468
E-commerce.............. 1 332 332 31 543 543
--------- --------- -------- --------- --------- -------
Total cost of revenues.. 1,807 6,274 6,669 2,398 5,797 5,971
--------- --------- -------- --------- --------- -------
Gross loss............... (798) (2,441) (2,723) (748) (1,120) (1,247)

Operating expenses:
Product development..... 1,467 2,672 2,748 1,101 1,999 2,020
Sales and marketing..... 600 2,744 2,999 796 1,654 1,698
General and
administrative......... 846 2,599 3,135 1,032 1,680 1,836
Amortization............ 32 185 2,347 39 322 1,402
--------- --------- -------- --------- --------- -------
Total operating
expenses............... 2,945 8,200 11,229 2,968 5,655 6,956
Operating loss........... (3,743) (10,641) (13,952) (3,716) (6,775) (8,203)
Other income (expense),
net..................... 43 (523) (522) (364) (140) (138)
========= ========= ======== ========= ========= =======
Net loss................. $ (3,700) $ (11,164) $(14,474) $ (4,080) $ (6,915) $(8,341)
Dividends on preferred
stock................... (144) (197) -- (98) (97)
========= ========= ======== ========= ========= =======
Net income (loss)
applicable to common
stockholders............ $ (3,844) $ (11,361) $(14,474) $ (4,178) $ (7,012) $(8,341)
========= ========= ======== ========= ========= =======
Historical basic income
(loss) per common
share................... $ (3.17) $ (7.28) $ (3.06) $ (3.96)
Historical weighted-
average common shares
outstanding............. 1,214,419 1,560,903 1,367,496 1,770,917
Pro forma basic income
(loss) per common
share...................
Pro forma weighted-
average common shares
outstanding.............
</TABLE>

--------------------------------
<TABLE>
<CAPTION>
As of December
31, As of June 30, 1999
---------------- --------------------
Pro Forma
1997 1998 Actual As Adjusted
------- ------- ------- -----------
<S> <C> <C> <C> <C>
Balance Sheet Data (at period end):
Working capital (deficit).............. $(2,763) $(3,726) $(5,664)
Property and equipment, Net............ 742 1,307 1,772
Total Assets........................... 2,638 5,282 8,953
Line of credit, notes payable and
capital lease obligations............. 2,414 3,623 5,531
Redeemable preferred stock............. 1,145 1,343 1,440
Stockholder's equity (deficit)......... (2,090) (2,000) (719)
</TABLE>

19
<PAGE>

Management's Discussion and Analysis of
Financial Condition and Results of Operations

You should read the following discussion of our financial condition and re-
sults of operations with our consolidated financial statements and the related
notes appearing elsewhere in this prospectus. This discussion contains for-
ward-looking statements which involve risks and uncertainties. Our actual re-
sults could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not limited to,
those set forth under "Risk Factors" and elsewhere in this prospectus.

Overview

We are a leading online sports new media company that focuses on providing re-
al-time, event-centered sports coverage. Our Total Sports networks feature our
TotalCast live-event programming that integrates interactive graphical, tex-
tual and statistical analysis and information. We have five Total Sports net-
works: the Total College Sports Network; the Total Baseball Network; the Total
Golf Network; the Total Racing Network; and the Total Sportfishing Network.
These networks consist of over 100 Web sites that provide live event coverage,
historical databases, expert analysis and breaking news of many collegiate and
professional sports. In 1999, we expect to provide real-time coverage of over
4,000 sporting events on our networks. We use our proprietary technology in-
frastructure and business processes, which we call our business architecture,
to collect sports statistics and information once and disseminate this content
in customized formats through multiple distribution channels. For example, we
use this architecture to deliver our content to over 250 other Web sites
through our syndication partners. In addition to a unique and compelling user
experience, our Total Sports networks provide advertisers and merchants with
online sponsorship and e-commerce opportunities associated with specific
sports, leagues, teams and events. We also publish sports encyclopedias, fan
guides and other sports-related books, which further establishes us as a
sports authority. Our number of page views have increased from approximately
38 million in 1997 to approximately 515 million in the first nine months of
1999, while the number of our sponsors and advertisers has grown from two in
1997 to 55 in the first nine months of 1999.

Revenues

We derive our revenues from three primary sources:

. digital publishing;

. print publishing; and

. e-commerce.

Digital publishing revenues result from the selling of sponsorships and banner
advertisements, licensing of statistical data and content, and providing Web
site development services for third-parties. During 1998, 54.3% of our reve-
nues came from digital publishing. We recognize sponsorship and advertising
revenues in the period in which the advertisement is displayed, provided that
no significant obligations remain. Sponsorships and advertising revenues are
season and event driven and are expected to constitute the majority of our fu-
ture revenue growth. We recognize licensing revenue for statistical data when
the statistical data has been delivered. We recognize content licensing reve-
nue over the period of the license agreement as we deliver the content. We
recognize Web site development revenue as the services are performed, provided
that no significant obligations remain. We record amounts billed or received
for which services have not yet been provided as deferred revenue on our bal-
ance sheets.

We derive print publishing revenues from the sale of sports encyclopedias, fan
guides and other sports-related books. During 1998, 34.3% of our revenues came
from sales of print publications. For titles we publish, we recognize print
publishing revenue upon the sale of our publications by a third-party distrib-
utor, which historically has been our primary distribution channel. In connec-
tion with these sales, we establish a reserve for right of returns of approxi-
mately 37.0% at the time revenue is recognized. For titles that we co-publish,
we recognize revenues as we earn fixed advances that are paid to us by the co-
publisher.

20
<PAGE>

We derive e-commerce revenues from the sale of sports equipment, apparel and
memorabilia through our online stores and through our live event merchandising.
During 1998, 11.4% of our revenues came from e-commerce sales. We recognize e-
commerce revenue once the merchandise has been shipped by our distributors. We
do not maintain any merchandise inventory.

In the past, we have entered into barter transactions for which we accepted
property and services, including computer equipment and advertising and promo-
tional consideration, as payment for sponsorships and advertising sales. We
record property and services received in barter transactions at fair market
value based on the amounts normally charged by our partners or customers to
third parties for similar property and services. We intend to continue to enter
into barter arrangements in the short term, however we intend to reduce barter
as a percentage of total revenues in future periods.

Cost of Revenues

Digital publishing cost of revenues consists primarily of compensation and ben-
efits for our editorial and operations staff (including contract labor), roy-
alty and license payments, content fees, and allocations of facilities and
other shared costs such as depreciation, telecommunications and computer-re-
lated expenses.

Print publishing cost of revenues consists primarily of the direct costs of our
print publications sold to customers, product fulfillment, amortization of de-
ferred publishing costs such as author fees and royalty payments, license fees,
and allocations of facilities and other shared costs.

E-commerce cost of revenues consists primarily of the direct costs of our mer-
chandise sold to customers, costs associated with credit cards and other com-
missions, outbound shipping and handling costs, and allocations of facilities
and other shared costs.

Operating Expenses

Product development expenses consist primarily of compensation and benefits for
our operations staff that support the development of new product offerings,
product enhancements and allocations of facilities and other shared costs.

Sales and marketing expenses consist primarily of compensation and benefits for
our sales, marketing and public relations staff, advertising, allocations of
facilities and other shared costs, and the value of the advertising we receive
in barter transactions in exchange for content or advertising on our Total
Sports networks.

General and administrative expenses consist primarily of compensation and bene-
fits for general management, finance and administrative staff, professional
fees for legal and accounting services, insurance, other office expenses and
allocations of facilities and other shared costs.

Amortization expense consists of amortization of goodwill resulting from acqui-
sitions, which is amortized over its useful life.

Other Income (Expense), Net

Other income (expense), net, consists of minority interest in joint venture
losses (earnings), equity in earnings (loss) of affiliate, interest income, in-
terest expense and other income.

Since inception, we have devoted a substantial portion of our resources to the
development of our proprietary publishing and TotalCast technologies and devel-
opment of key corporate relationships. We have been dependent on funding from
debt and equity financing and strategic corporate alliances. We have not been
profitable since inception and had an accumulated deficit of approximately
$21,923,000 as of June 30, 1999. We expect to incur additional operating losses
over the next several years in connection with our continued technology devel-
opment, increased marketing efforts and expansion of our workforce.

21
<PAGE>

Recent Developments

In November 1999, we completed an approximately $35,500,000 private placement
of our Series D preferred stock, which is more fully described under "Certain
Transactions."

Also in November 1999, we entered into a strategic partnership agreement with
NBC Sports, Inc., whereby NBC Sports will provide $17.4 million of on-air pro-
motion and marketing of our real-time live sporting event coverage using our
TotalCast brand. NBC Sports will direct users to Web sites owned, co-owned or
controlled by NBC Sports from which users can access our live events coverage.
The NBC Sports agreement is for 51 months, and calls for NBC Sports to provide
minimum levels of advertising on a quarterly basis. In exchange for these mar-
keting and advertising services, we issued shares of our common stock and Se-
ries E preferred stock to NBC Sports. For a more detailed description of this
agreement, see "Business--Strategic Relationships."

22
<PAGE>

Results of Operations

The following table sets forth our results of operations as a percentage of to-
tal revenue for the periods indicated:

<TABLE>
<CAPTION>
-------------------------------------------------
Period from
February 20,
1997 Six Months Ended
Through Year Ended -------------------
December 31, December 31, June 30, June 30,
1997 1998 1998 1999
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Revenues:
Digital publishing 73.1% 54.3% 65.2% 62.8%
Print publishing 25.5 34.3 29.9 22.2
E-commerce 1.4 11.4 4.9 15.0
<CAPTION>
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Total revenues 100.0 100.0 100.0 100.0
<CAPTION>
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Cost of revenues:
Digital publishing 138.3 93.1 101.9 81.0
Print publishing 40.7 62.0 41.6 31.4
E-commerce 0.1 8.6 1.9 11.6
<CAPTION>
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Total cost of revenues 179.1 163.7 145.4 124.0
<CAPTION>
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Gross loss (79.1) (63.7) (45.4) (24.0)
Operating Expenses:
Product development 145.4 69.7 66.7 42.7
Sales and marketing 59.5 71.6 48.3 35.4
General and
administrative 83.9 67.8 62.6 35.9
Amortization 3.1 4.8 2.3 6.9
<CAPTION>
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Total operating expenses 291.9 213.9 179.9 120.9
Operating loss (371.0) (277.6) (225.3) (144.9)
Other income (expense),
net 4.3 (13.7) (22.0) (3.0)
<CAPTION>
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Net loss (366.7)% (291.3)% (247.3)% (147.9)%
<CAPTION>
============ ============ ======== ========
</TABLE>

Our acquisitions and equity investments have had a significant impact on our
financial condition and results of operations. Due to the use of the purchase
method of accounting for our acquisitions, the consolidated statements of oper-
ations for each of the reporting periods from February 20, 1997 (date of incep-
tion) through June 30, 1999 include results from operations for each of the ac-
quisitions from the date of each acquisition only. Moreover, the consolidated
balance sheet as of December 31, 1998 and the consolidated statements of opera-
tions for 1997 and 1998 do not include the assets, liabilities, and results of
operations relating to acquisitions completed after the last day of each fiscal
period. As a result, comparisons to prior operating results and prior balance
sheets are impacted materially.

Six Months Ended June 30, 1999 Compared to the Six Months Ended June 30, 1998

Total Revenues. Total revenues for the six months ended June 30, 1999 were
$4,677,000 compared to $1,650,000 for the six months ended June 1998, an in-
crease of $3,027,000. The increase in total revenues is primarily attributable
to increased sales of sponsorships and print publications.

Barter transactions, in which we received advertising or other goods and serv-
ices in exchange for content or advertising on our Total Sports networks, ac-
counted for approximately 11.8% of our total revenues for the six months ended
June 30, 1999. Barter transactions in exchange for advertising on our Total
Sports networks and our print publications accounted for approximately 13.6% of
our total revenues during the six months ended June 30, 1998. In future peri-
ods, we intend to maximize cash digital publishing revenue, although we will
continue to enter into barter relationships as appropriate.

23
<PAGE>

Digital Publishing Revenues. Digital publishing revenues increased to
$2,935,000 for the six months ended June 30, 1999 from $1,076,000 for the six
months ended June 1998, an increase of $1,859,000. The increase in digital pub-
lishing revenues is primarily attributable to increases in sales of sponsor-
ships and advertising, including sales of $373,000 from Golf.com in which we
acquired an interest in mid-1998. In addition, barter transactions for sponsor-
ships and advertising for the six months ended June 30, 1999 were $554,000 as
compared to $224,000 for the six months ended June 30, 1998. We expect digital
publishing revenues to increase in future periods in both absolute dollars and
as a percentage of total revenues due to our efforts to add new sponsors and
increase the volume of sponsorships with existing sponsors, as well as our ef-
fort to increase the number and types of live events we cover. We anticipate
the majority of our future growth will be derived from sales of sponsorships
and advertising related to our Total Sports networks.

Print Publishing Revenues. Print publishing revenues increased to $1,041,000
for the six months ended June 30, 1999 from approximately $493,000 for the six
months ended June 1998, an increase of $548,000. The increase in print publish-
ing revenue is due primarily to 14 titles being available for sale during the
six months ended June 30, 1999 as compared to seven titles available during the
six months ended June 30, 1998.

E-commerce Revenues. E-commerce revenues increased to $701,000 for the six
months ended June 30, 1999 from approximately $81,000 for the six months ended
June 1998, an increase of approximately $620,000. The increase in e-commerce
revenues is primarily attributable to increases in merchandise sales from our
Total College Sports Network and Golf.com stores. We had no merchandise sales
from Golf.com for the six months ended June 30, 1998.

Total Cost of Revenues. Total cost of revenues for the six months ended June
30, 1999 was $5,797,000 compared to $2,398,000 for the six months ended June
1998, an increase of $3,399,000. The increase in total cost of revenues is pri-
marily attributable to increased staffing levels and costs associated with in-
creased sales of print publications.

Digital Publishing Cost of Revenues. Digital publishing costs of revenues in-
creased to $3,786,000 for the six months ended June 30, 1999 from $1,682,000
for the six months ended June 1998, an increase of $2,104,000. This increase is
due primarily to planned increases in the number of employees in our editorial
and operations staff over prior periods, increases in contract labor and other
outside services due to our expanded coverage of sporting events, and increases
in commissions relating to sponsorships of NCAA championships.

Print Publishing Cost of Revenues. Print publishing costs of revenues increased
to $1,468,000 for the six months ended June 30, 1999 from $685,000 for the six
months ended June 1998, an increase of $783,000. The increase in print publish-
ing cost of revenues is due primarily to 14 titles being available for sale
during the six months ended June 30, 1999 as compared to seven titles available
during the six months ended June 30, 1998.

E-commerce Cost of Revenues. E-commerce cost of revenues increased to $543,000
for the six months ended June 30, 1999 from $31,000 for the six months ended
June 1998, an increase of $512,000. The increase in e-commerce cost of revenues
is due primarily to the direct costs of merchandise associated with the in-
creased volume of sales and increased sales of golf merchandise from our
Golf.com store, which generate lower margins than our other e-commerce merchan-
dise.

Product Development Expenses. Product development expenses increased to
$1,999,000 for the six months ended June 30, 1999 from approximately $1,101,000
for the six months ended June 1998, an increase of $898,000. The increase in
product development expenses is due primarily to planned increases in expendi-
tures related to improving our TotalCast technology for existing sports and
adding TotalCasts of additional sports, planned increases in the number of em-
ployees performing product development projects, and $185,000 of legal and due
diligence costs related to a potential acquisition of a sports technology com-
pany that was not consummated. We expect product development expenses to in-
crease in absolute dollars as we continue to enhance our TotalCast technology
and develop new service offerings.

24
<PAGE>

Sales and Marketing Expenses. Sales and marketing expenses increased to
$1,654,000 for the six months ended June 30, 1999 from approximately $796,000
for the six months ended June 1998, an increase of $858,000. The increase in
sales and marketing expenses is due primarily to our continued efforts to build
a dedicated sales force, increased advertising, including $554,000 of expense
related to barter transactions. We expect sales and marketing expenses to in-
crease in absolute dollars in future periods as we continue to hire additional
sales and marketing personnel and expand our marketing and promotional activi-
ties.

General and Administrative Expenses. General and administrative expenses in-
creased to $1,680,000 for the six months ended June 30, 1999 from $1,032,000
for the six months ended June 1998, an increase of $648,000. The increase in
general and administrative expenses is primarily due to planned increases in
our administrative and financial personnel, increases in professional fees and
increases in rent for office facilities. We expect that we will incur increased
general and administrative expenses as we hire additional personnel and incur
additional costs related to the growth of our business and our operation as a
public company. Accordingly, we anticipate that general and administrative ex-
penses will continue to increase in absolute dollars in future periods.

Amortization Expense. Amortization expense consists of amortization of goodwill
resulting from our acquisitions. Amortization expense increased to $322,000 for
the six months ended June 30, 1999 from approximately $39,000 for the six
months ended June 1998, an increase of $283,000. The increase in amortization
expense is primarily due to one month of amortization of goodwill resulting
from our acquisition of Long Distance Technologies, Inc. totaling $180,000 and
an additional five months of goodwill amortization in 1999 resulting from our
Total College Communications Company acquisition totaling $69,000. The Long
Distance Technologies acquisition occurred on June 4, 1999.

Other Income (Expense), Net. Other income (expense), net, decreased to expense
of $140,000 for the six months ended June 30, 1999 from expense of $364,000 for
the six months ended June 30, 1998. This decrease was primarily attributable to
a decrease in interest expense to $161,000 for the six months ended June 30,
1999 from $326,000 for the six months ended June 1998, a decrease of $165,000.
The decrease in interest expense is due primarily to the absence of interest
expense on four convertible notes payable, in the aggregate principal amount of
$3.6 million, issued between January 14, 1998 and June 16, 1998 and amortiza-
tion of the discount resulting from warrants issued in connection with the
notes payable. Such interest on the notes and amortization of the discount to-
taled $174,000 during the six months ended June 30, 1998. These notes were con-
verted into Series C preferred stock in August 1998. A similar convertible note
payable in the principal amount of $4.0 million with warrants was issued on
June 4, 1999. The interest and amortization of the discount totalled $51,000
for the six months ended June 30, 1999. In addition, the six months ended June
30, 1998 reflects a $42,000 minority interest in the earnings of our Total Col-
lege Communications joint venture. We acquired the remaining 50% of Total Col-
lege Communications on June 2, 1998 and, consequently, its entire operating re-
sults are a part of our consolidated results for the six months ended June 30,
1999.

Income Taxes. No benefit for federal and state income taxes is reported in the
financial statements for the six months ended June 30, 1999 or 1998 as the net
deferred tax assets generated, consisting primarily of operating and economic
loss carryforwards, were offset by a full valuation allowance.

Net Loss. We had a net loss of $6,915,000 for the six months ended June 30,
1999 as compared to $4,080,000 for the six months ended June 30, 1998, an in-
crease of $2,835,000. We expect to incur net losses for the foreseeable future
as we incur expenses to enhance our current product offerings, develop new
products and services and pursue new strategic partnerships to grow our busi-
ness.

Year Ended December 31, 1998 Compared to the Period From February 20, 1997 to
December 31, 1997

Total Revenues. Total revenues for the year ended December 31, 1998 were
$3,833,000 compared to $1,009,000 for the period from February 20, 1997 to De-
cember 31, 1997, an increase of $2,824,000. The increase in total revenues is
primarily attributable to increased sales of sponsorships and print publica-
tions as discussed below and a full year of operations in 1998 versus 1997. Our
principal operations during 1997 did not begin until after the acquisition of
our sports content business from KOZ inc. on March 31, 1997.

25
<PAGE>

Barter transactions in which we received advertising or other goods and serv-
ices in exchange for content or advertising on our Total Sports networks ac-
counted for approximately 17.5% of our total revenues in 1998. We had no bar-
ter revenues during 1997.

Digital Publishing Revenues. Digital publishing revenues increased to
$2,083,000 in 1998 from $738,000 in 1997, an increase of $1,345,000. The in-
crease in digital publishing revenues is primarily attributable to increases
in sales of sponsorships and advertising and $572,000 in barter transactions
for sponsorships and advertising in 1998. We had no barter transactions for
sponsorships and advertising in 1997.

Print Publishing Revenues. Print publishing revenues increased to $1,315,000
in 1998 from $257,000 in 1997, an increase of $1,058,000. The increase in
print publishing revenues is due to the fact that our publishing operations
did not commence until the summer of 1997, as compared to a full year of oper-
ations in 1998. Seven titles were available for sale during 1998 as compared
to three titles during 1997. During 1998, we recognized $699,000 in net reve-
nues from our publication, Total Hockey, and $97,000 in barter transactions
for print publications. We had no sales of Total Hockey or barter transactions
for print publications in 1997.

E-commerce Revenues. E-commerce revenues increased to $435,000 in 1998 from
$14,000 in 1997, an increase of approximately $421,000. The increase in e-com-
merce revenues is primarily attributable to the increase in the number of our
online e-commerce stores from two as of December 31, 1997 to 13 as of December
31, 1998.

Total Cost of Revenues. Total cost of revenues in 1998 was $6,274,000 compared
to $1,807,000 in 1997, an increase of $4,467,000. The increase in total cost
of revenues is primarily attributable to increases in staffing, sales of print
publications and e-commerce activities and a full year of operations in 1998
versus 1997.

Digital Publishing Cost of Revenues. Digital publishing cost of revenues in-
creased to $3,567,000 in 1998 from $1,395,000 in 1997, an increase of
$2,172,000. The increase is due primarily to planned increases in the number
of employees in our editorial and operations staff, increases in contract la-
bor and other outside services due to our expanded coverage of sporting events
and increases in commissions relating to sponsorships of NCAA championships.

Print Publishing Cost of Revenues. Print publishing cost of revenues increased
to $2,375,000 in 1998 from $410,000 in 1997, an increase of $1,965,000. The
increase in print publishing cost of revenues is due primarily to the fact
that our publishing operations did not commence until the summer of 1997 as
compared to a full year of operations in 1998, and seven titles being avail-
able for sale during 1998 as compared to three titles available during 1997.

E-commerce Cost of Revenues. E-commerce cost of revenues increased to $332,000
in 1998 from $1,000 in 1997, an increase of $331,000. The increase in e-com-
merce cost of revenues is due primarily to the direct costs of merchandise as-
sociated with the increased volume of e-commerce sales.

Product Development Expenses. Product development expenses increased to
$2,672,000 in 1998 from approximately $1,467,000 in 1997, an increase of
$1,205,000. The increase in product development expenses is due primarily to
planned increases in expenditures related to improving our existing TotalCast
technology and adding TotalCasts of additional sports, including increased us-
age of contract labor and other outside services and planned increases in the
number of employees performing product development projects.

Sales and Marketing Expenses. Sales and marketing expenses increased to
$2,744,000 in 1998 from approximately $600,000 in 1997, an increase of
$2,144,000. The increase in sales and marketing expenses is due primarily to
increases in marketing salaries and benefits, travel expenses and advertising
resulting from our efforts to build a dedicated sales force and expand our
marketing activities. In 1998, we had $572,000 of expense related to barter
transactions. We had no barter transactions in 1997.

26
<PAGE>

General and Administrative Expenses. General and administrative expenses in-
creased to $2,599,000 in 1998 from $846,000 in 1997, an increase of $1,753,000.
The increase in general and administrative expenses is primarily due to planned
increases in our administrative and financial staff, increased professional
fees, increased rent for office facilities and a full year of operations in
1998 compared to 1997.

Amortization Expense. Amortization expense increased to $185,000 in 1998 from
approximately $32,000 in 1997, an increase of $153,000. The increase in amorti-
zation expense is primarily due to a full year of amortization of goodwill re-
sulting from the KOZ and Sports Extra acquisitions, which occurred on March 31,
1997.

Other Income (Expense), Net. Other income (expense), net, decreased to expense
of $523,000 in 1998 from income of $43,000 in 1997. This decrease was primarily
attributable to an increase in interest expense to $507,000 in 1998 from
$100,000 in 1997, an increase of $407,000. The increase in interest expense is
due primarily to increased borrowings on our line of credit facility, interest
on four convertible notes payable issued in 1998 for proceeds of $3.6 million,
and amortization of the discount related to warrants issued in connection with
the four convertible notes. As all four notes payable were converted into Se-
ries C preferred stock in 1998, the entire discount attributable to the war-
rants, totaling $146,000, was charged to interest expense during 1998. In addi-
tion, minority interest in joint venture earnings and losses changed from a
loss of $138,000 in 1997 to earnings of $42,000 in 1998, a difference of
$180,000. This change is due to the increase in Total College Communications
Company's reported earnings of $83,000 in 1998 as compared to losses of
$276,000 in 1997. We acquired the remaining 50% interest in Total College Com-
munications Company on June 2, 1998.

Income Taxes. No benefit for federal and state income taxes is reported in the
financial statements for 1998 or 1997 as the net deferred tax assets generated,
consisting primarily of operating and economic loss carryforwards, were offset
by a full valuation allowance.

Net Loss. We had a net loss of $11,164,000 in 1998 as compared to $3,700,000 in
1997, an increase of $7,464,000. We expect to incur expenses to enhance our
current product offerings, develop new products and services and pursue new
strategic partnerships to grow our business.

27
<PAGE>

Selected Quarterly Results of Operations

The following tables represent unaudited consolidated quarterly statement of
operations data for each of the nine quarters in the period ended June 30,
1999, as well as this data expressed as a percentage of revenues. In the opin-
ion of management, this information has been prepared on the same basis as the
consolidated financial statements appearing in other sections of this prospec-
tus, and all necessary adjustments, consisting only of normal recurring adjust-
ments, have been included in the amounts stated below to present fairly the un-
audited quarterly results. The quarterly information should be read in connec-
tion with our consolidated financial statements and the related notes appearing
elsewhere in this prospectus. The operating results for any quarter are not
necessarily indicative of results to be expected for any future period.

<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------------------------------
1997 1998
------------------------------------- -----------------------------------------------------
Jun. 30(/1/) Sep. 30 Dec. 31 Mar. 31 Jun. 30 Sep. 30 Dec. 31
------------ --------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Digital
publishing..... $ 351,616 $ 108,973 $ 277,430 $ 913,940 $ 161,931 $ 394,399 $ 612,709
Print
publishing..... 7,950 142,689 106,705 11,306 481,411 74,245 747,730
E-commerce...... -- -- 13,586 39,274 41,994 151,068 202,836
--------- --------- ----------- ----------- ----------- ----------- -----------
Total revenue... 359,566 251,662 397,721 964,520 685,336 619,712 1,563,275
Cost of revenues:
Digital
publishing..... 445,321 186,829 762,859 838,959 842,611 912,263 972,843
Print
publishing..... 47,592 164,410 198,284 281,122 404,020 258,587 1,431,520
E-commerce...... -- -- 1,249 13,837 17,638 150,455 149,790
--------- --------- ----------- ----------- ----------- ----------- -----------
Total cost of
revenues....... 492,913 351,239 962,392 1,133,918 1,264,269 1,321,305 2,554,153
--------- --------- ----------- ----------- ----------- ----------- -----------
Gross profit
(loss).......... (133,347) (99,577) (564,671) (169,398) (578,933) (701,593) (990,878)
Operating
Expenses:
Product
development.... 344,004 386,261 736,902 457,127 643,468 671,237 900,137
Sales and
marketing...... 146,667 186,987 266,818 339,645 456,735 763,659 1,183,860
General and
administrative.. 321,730 46,002 478,182 464,839 567,262 775,954 790,547
Amortization.... 10,518 10,519 10,519 16,587 22,102 62,116 84,680
--------- --------- ----------- ----------- ----------- ----------- -----------
Total operating
expenses....... 822,919 629,769 1,492,421 1,278,198 1,689,567 2,272,966 2,959,224
--------- --------- ----------- ----------- ----------- ----------- -----------
Operating loss... (956,266) (729,346) (2,057,092) (1,447,596) (2,268,500) (2,974,559) (3,950,102)
Other income
(expense), net.. (30,045) (28,159) 101,328 (82,004) (270,359) (146,503) (24,050)
--------- --------- ----------- ----------- ----------- ----------- -----------
Net loss......... $(986,311) $(757,505) $(1,955,764) $(1,529,600) $(2,538,859) $(3,121,062) $(3,974,152)
========= ========= =========== =========== =========== =========== ===========
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------------------------------
1997 1998
------------------------------------- -----------------------------------------------------
Jun. 30(/1/) Sept. 30 Dec. 31 Mar. 31 Jun. 30 Sept. 30 Dec. 31
------------ --------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Annual:
Total:
Total revenue.... 36% 25% 39% 25% 18% 16% 41%
Gross profit
(loss).......... (17)% (12)% (71)% (7)% (24)% (29)% (41)%
Operating loss... (26)% (19)% (55)% (14)% (21)% (28)% (37)%
Net loss......... (27)% (20)% (53)% (14)% (23)% (28)% (36)%
<CAPTION>
---------------------------
1999
---------------------------
Mar. 31 Jun. 30
------------- -------------
<S> <C> <C>
Revenues:
Digital
publishing..... $ 1,527,196 $ 1,408,284
Print
publishing..... 789,730 250,833
E-commerce...... 296,092 405,019
------------- -------------
Total revenue... 2,613,018 2,064,136
Cost of revenues:
Digital
publishing..... 1,551,586 2,234,614
Print
publishing..... 663,993 804,009
E-commerce...... 239,397 303,894
------------- -------------
Total cost of
revenues....... 2,454,976 3,342,517
------------- -------------
Gross profit
(loss).......... 158,042 (1,278,381)
Operating
Expenses:
Product
development.... 862,306 1,137,011
Sales and
marketing...... 631,757 1,022,487
General and
administrative.. 698,081 982,108
Amortization.... 72,800 248,882
------------- -------------
Total operating
expenses....... 2,264,944 3,390,488
------------- -------------
Operating loss... (2,106,902) (4,668,869)
Other income
(expense), net.. (67,570) (72,021)
------------- -------------
Net loss......... $(2,174,472) $(4,740,890)
============= =============
<CAPTION>
---------------------------
1999
---------------------------
Mar. 31 Jun. 30
------------- -------------
<S> <C> <C>
Percentage of
Annual:
Total:
Total revenue.... 56% 44%
Gross profit
(loss).......... 14% (114)%
Operating loss... (31)% (69)%
Net loss......... (32)% (69)%
</TABLE>
- --------
(1) Total Sports was formed on February 20, 1997 but did not commence opera-
tions until March 31, 1997, in connection with its acquisition of the
sports content business of KOZ inc.

28
<PAGE>

Our operating results have varied on a quarterly basis during our operating
history and may fluctuate in the future as a result of a variety of factors,
many of which are outside our control. Historically, we have reported our high-
est revenues in the first quarter, which coincides with the NCAA Champsionship
men's basketball tournament occurring in March of each year. Additionally, as a
result of our limited operating history and the emerging nature of the sports
information markets in which we compete, it is difficult for us to forecast our
revenues or losses accurately. Our expense levels are largely based on our
staffing levels and are to a large extent fixed. Accordingly, we may be unable
to adjust spending in a timely manner to compensate for any unexpected revenue
shortfall. Any significant shortfall in relation to our expectations could
cause a material adverse effect on our business, results of operations and fi-
nancial condition. In addition, we currently intend to significantly increase
our operating expenses to:

. develop and enhance our technology

. increase sales and marketing and operations staff expenses

. fund promotion and advertising expenditures to build brand awareness

. create, introduce and enhance our current product offerings

. acquire content and other business and technology services

. enter into new strategic partnership agreements domestically and
internationally.

To the extent that such expenses precede or are not subsequently followed by
increased revenue, our business, results of operations and financial condition
could be materially adversely affected.

Liquidity and Capital Resources

Our capital requirements have been and will continue to be significant, and to
date, our cash requirements have exceeded our cash flow from operations. Since
our inception in 1997, we have satisfied cash requirements and financed our op-
erations primarily through borrowings, capital lease financings, convertible
bridge loans and private sales of our equity securities.

From our inception in February 1997 through June 1997, we funded operations
with $750,000 in equity contributions from our founders. In June 1997, we com-
pleted a private placement of our Series A preferred stock and common stock
warrants with net proceeds of $1,180,000. In November 1997, we completed a pri-
vate placement of our Series B preferred stock with net proceeds of $1,937,000.
In August 1998 and January and April 1999, we completed private placements of
our Series C and C1 preferred stocks with net proceeds totaling $15,617,000. In
November 1999, we completed an approximately $35,500,000 private placement of
our Series D preferred stock. Included in the proceeds of this placement is
$6,500,000 from previously issued convertible notes that were converted into
Series D preferred stock.

In addition to funding ongoing operations and capital expenditures, our princi-
pal commitments consist of various obligations under short and long-term
borrowings, notes payable, operating leases and capital leases. On February 24,
1999, we issued a note payable for $114,921 to First Raleigh Telex, LLC, a re-
lated entity controlled by Frank A. Daniels, Jr., a director and stockholder of
Total Sports. The note is due on February 24, 2002, bears interest at 9.0% per
annum, and is collateralized by computer equipment. On August 5, 1999, we re-
newed our $3.5 million line of credit agreement with First Union National Bank.
Our obligations under this line of credit agreement are secured by a personal
guarantee of Frank A. Daniels, III, our Chairman and Chief Executive Officer,
and our property and equipment. Terms of this agreement require repayment on
November 30, 1999 plus interest at a rate equal to 1.5% over the LIBOR market
index rate. As of June 30, 1999, the LIBOR market index rate was 5.04% and, ac-
cordingly, the interest rate was 6.54%. Also, on August 5, 1999, we entered
into a temporary increase in our line of credit facility of $500,000, which ex-
pires on November 30, 1999. The temporary increase has the same terms as our
existing agreement. Between June and November 1999, we entered into convertible
bridge loans for $6.5 million. We issued warrants to purchase 75,344 shares of
common stock that expire in May 2009 at an exercise price of $16.59 in connec-
tion with the convertible bridge loans. In November 1999, the $6.5 million ag-
gregate principal amount of these loans was converted into 391,802 shares of
our Series D preferred stock.

29
<PAGE>

On August 13, 1999, we entered into a ten-year operating lease for office
space with First Raleigh Telex. This lease requires monthly payments of
$24,923. As of June 30, 1999, total rent expense for all outstanding operating
leases is approximately $30,000 per month. During the six months ended June
30, 1999, we entered into capital leases for the use of certain computer and
telecommunications equipment with purchase prices totaling approximately
$260,000. These capital leases require total monthly payments of approximately
$11,000 through May 2002. Total payments for outstanding capital leases as of
June 30, 1999 are approximately $19,200 per month.

As of June 30, 1999, we had $59,000 in cash and cash equivalents. Net cash
used in operating activities was $3,825,000 and $9,860,000 for 1997 and 1998.
Net cash used in operating activities was $4,311,000 and $6,622,000 for the
six months ended June 30, 1998 and 1999. Net cash used in operating activities
resulted from our net operating losses, adjusted for certain non-cash items
including compensation and interest expense related to the issuance of options
and warrants to key employees and business partners. Non-cash charges relating
to the issuance of these options and warrants were $212,000 for 1998 and
$127,000 and $79,000 for the six months ended June 30, 1998 and 1999. Non-cash
charges relating to depreciation and amortization expense were $255,000 and
$760,000 for 1997 and 1998 and $283,000 and $781,000 for the six months ended
June 30, 1998 and 1999.

Net cash used in investing activities was $1,772,000 and $964,000 for 1997 and
1998. Net cash used in investing activities was $402,000 and $376,000 for the
six months ended June 30, 1998 and 1999. Net cash used in investing activities
resulted primarily from capital expenditures relating to purchases of computer
and office equipment and acquisitions of and investments in related business-
es.

Net cash provided by financing activities was $5,834,000 and $11,272,000 for
1997 and 1998. Net cash provided by financing activities for the six months
ended June 30, 1998 and 1999 was $4,633,000 and $6,373,000. Net cash provided
by financing activities for these periods included the issuance of short and
long-term borrowings and notes payable, long-term capital lease obligations
and preferred stock, common stock and warrants.

No provision for federal or state income taxes has been recorded as we in-
curred net operating losses for all periods. However, we have paid state fran-
chise taxes during 1997 and 1998. As of December 31, 1998, we had approxi-
mately $13.6 million of net operating and economic loss carryforwards avail-
able to offset future federal and state taxable income. These carryforwards
expire in years 2011 through 2018. As a result of various equity transactions
during 1997, 1998 and 1999, we believe our company has undergone an "ownership
change" as defined by Section 382 of the Internal Revenue Code. Accordingly,
the use of a portion of the net operating and economic loss carryforwards may
be limited. Due to this limitation, and the uncertainty regarding the ultimate
use of the net loss carryforwards, we have not recorded any net tax benefit
for losses by the provision of a valuation allowance for the entire amount of
our net deferred tax assets. In addition, future sales by us of shares of our
capital stock, including sales pursuant to this offering, and/or transfers of
a substantial number of shares of common stock by the current stockholders,
may restrict our ability to use our net operating loss carryforwards.

We believe that the net proceeds from this offering, combined with current
cash and cash equivalent balances will be sufficient to fund our operating re-
quirements for working capital and capital expenditures for at least the next
12 months. Thereafter, we might need to raise additional funds. To the extent
that we encounter unanticipated opportunities, we may seek to raise additional
funds sooner, in which case we may sell additional equity or debt securities
or borrow funds from banks. No assurances can be given that our efforts to
raise these funds will be successful. In the event we are unable to raise
these funds, our operations would be materially adversely affected. Sales of
additional equity or convertible debt securities would result in additional
dilution of our stockholders. For a discussion of the risks associated with
raising additional capital, see the "Risk Factors" and the "Dilution" sections
elsewhere in this prospectus.

30
<PAGE>

Year 2000 Readiness, Costs of Compliance and Effect on Operations

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year in respective date
fields. We use a combination of hardware devices run by computer programs at
our support center and offsite transmission locations to process transactions
and other data which are essential to our business operations. The Year 2000
issue and its impact on data integrity could result in system interruptions,
miscalculations or failures causing disruption of operations.

The following discussion about the status of our Year 2000 activities, the
costs expected to be associated with the activities and the results we expect
to achieve constitute forward-looking information. As noted below, there are
many uncertainties involved with the Year 2000 issue, including the extent to
which we will be able to adequately provide for contingencies that may arise,
as well as the broader scope of the Year 2000 issue as it may affect third
parties and our sponsors. Accordingly, the costs and results of our Year 2000
activities and the extent of any impact on our results of operations could
vary materially from that stated herein.

State of Readiness. In February 1999, we formed a Year 2000 committee com-
prised of our Chief Technology Officer and our technical specialists. The com-
mittee was responsible for developing our Year 2000 compliance assessment
plan, which consists of a three-phase process of:

. identifying both information technology and non-information technology
systems that are not Year 2000 compliant

. determining their significance to our operations

. developing plans to resolve issues where necessary.

We have completed our Year 2000 compliance assessment plan, which included
testing all of our information and non-information technology systems as well
as our internally developed TotalCasts. We identified potential problems in
some of our non-critical systems and began repairing, upgrading or replacing
such systems in the second quarter of 1999. Based on our testing and assess-
ment, we believe that our information and non-information technology, as well
as internally developed systems, are Year 2000 compliant. We have also initi-
ated written communications with all of our significant vendors, suppliers and
financial institutions to determine the status of their Year 2000 compliance.
Of those surveyed, a substantial majority have either provided certification
statements for their products or services or indicated that they will be Year
2000 compliant prior to December 31, 1999. In addition, our annual maintenance
contracts with our software and hardware vendors provide for updates, includ-
ing Year 2000 compliance updates. All of our third-party software vendors have
provided either a Year 2000 compliance certificate for the software version we
currently use or a free upgrade/patch to a version which is Year 2000 compli-
ant. We will continue to monitor our critical and non-critical systems.

Costs. To date, costs that we have incurred or expect to incur in connection
with identifying and evaluating Year 2000 compliance issues have been insig-
nificant. Most of our expenses relate to, and are expected to continue to re-
late to, the operating costs associated with time spent by employees in the
assessment process, the repair, upgrade or replacement process and general
Year 2000 compliance matters. We estimate that the total cost of our Year 2000
activities will be insignificant and we intend to expense such costs as they
are incurred. We expect to fund all of these expenses from working capital. In
the event that we incur expenses higher than anticipated, such additional ex-
penses could harm our business.

Risks. If we fail to solve a Year 2000 compliance problem with one of our sys-
tems or if our key vendors, suppliers or financial institutions do not com-
plete their Year 2000 activities, the result could be a failure or interrup-
tion of normal business operations. Although we believe that the potential for
significant interruptions to normal operations should be minimal due to the
relative newness of our systems, our business is exposed to risks associated
with the Year 2000 problem. Our primary risks of Year 2000 failures are those
related to external service providers including telecommunications, electrical
power and Internet commerce systems that we rely

31
<PAGE>

upon daily. The most reasonably likely worst-case scenario is a failure related
to one or several of our external service providers referenced above. Such
failure or failures could cause any of the following:

. protracted interruption of electrical power to our operations and
Internet servers which could materially and adversely impact our ability
to enable online transactions and other services

. significant or widespread failure of software products and services
provided to us by third parties

. significant or widespread failure of third party computer systems with
which our systems interface.

We do not currently have any information about the Year 2000 status of our
sponsors. Failure of our sponsors' equipment or software due to Year 2000 prob-
lems may result in reduced funds available for sponsorship and advertising ac-
tivities. In addition, the purchasing patterns of sports users may be affected
by Year 2000 issues as companies expend significant resources to correct their
current systems for Year 2000 compliance. Finally, we are subject to external
forces that might generally affect industry and commerce, such as utility or
transportation company Year 2000 compliance failures and related service inter-
ruptions. The occurrence of any Year 2000 compliance failures that affect our
sponsors, our audience or industry and commerce generally could have a material
adverse effect on our business, results of operations and financial condition.

Contingency Plan. In the event that we do not complete our Year 2000 activi-
ties, we will manually perform those tasks which would otherwise be performed
by our non-Year 2000-compliant systems until such systems are repaired, up-
graded or replaced. In the event we experience a Year 2000 related problem as a
result of our communications or electrical power providers, we expect the oper-
ations and transmission of our college football bowl coverage on or about Janu-
ary 1, 2000 will be affected. Under this scenario, our employees will manually
call in information using land-based telephone lines with analog or digital
cellular telephones as backup. In this event, we anticipate that we will expe-
rience delays in our TotalCast transmissions for those events. We are not cur-
rently able to determine the effect on our revenues, if any, from these delays
or interruptions.

Newly Adopted Accounting Standards

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Cost of Computer Software Devel-
oped or Obtained for Internal Use. Statement of Position 98-1 is effective for
financial statements for years beginning after December 15, 1998. Statement of
Position 98-1 provides guidance over accounting for computer software develop-
ment or obtained for internal use including the requirement to capitalize spec-
ified costs and amortization of such costs. The adoption of this statement by
Total Sports did not have an effect on our capitalization policy during the six
months ended June 30, 1999.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, Reporting on the Costs of Start-Up Activities.
Statement of Position 98-5, which is effective for fiscal years beginning after
December 15, 1998, provides guidance on the financial reporting of start-up
costs and organization costs. It requires costs of start up activities and or-
ganization costs to be expensed as incurred. As we have expensed these costs
historically, the adoption of this standard did not have an impact on our re-
sults of operations, financial position or cash flows for the six months ended
June 30, 1999.

Recently Issued Accounting Standards Not Yet Adopted

In June 1998, the Financial Accounting Standards Board issued Statement of Fi-
nancial Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities. Statement of Financial Accounting Standards No. 133 estab-
lishes accounting and reporting standards for derivative instruments, including
derivative instruments embedded in other contracts and for hedging activities.
It requires that an entity recognize all derivatives as either assets or lia-
bilities in the statement of financial position and measure those instruments
at fair value. Statement of Financial Accounting Standards No. 133 (as amended
by Statement of Financial Accounting Standards No. 137, Accounting for Deriva-
tive Instruments and Hedging Activities--Deferral of the Effective Date of

32
<PAGE>

FASB Statement No. 133) is effective for the first fiscal quarter of fiscal
2001; earlier application is encouraged. As of June 30, 1999, we have not de-
termined the effect of Statement of Financial Accounting Standards No. 133 on
our consolidated financial statements.

Inflation

We do not expect inflation to have a significant impact on our operations.

Seasonality

We expect that our revenues will be higher leading up to and during major U.S.
sports seasons and lower at other times of the year, particularly during the
summer months. The effect of such seasonal fluctuations in revenues could be
enhanced or offset by revenues associated with major sports that do not occur
every year. We believe that advertising and sponsorship sales in traditional
media, such as television, generally are lower in the first and third calendar
quarters of each year, and that advertising expenditures fluctuate signifi-
cantly with economic cycles. Depending on the extent to which these factors ap-
ply to Internet advertising, the seasonality and cyclicality in the level of
our advertising revenues could become more pronounced. The foregoing factors
could have a material adverse affect on our business, results of operations and
financial condition.

33
<PAGE>

Business

Overview

We are a leading online sports new media company that focuses on providing re-
al-time, event-centered sports coverage. Our Total Sports networks feature our
TotalCast live-event programming that integrates interactive graphical, tex-
tual and statistical analysis and information. We have five Total Sports net-
works: the Total College Sports Network; the Total Baseball Network; the Total
Golf Network; the Total Racing Network; and the Total Sportfishing Network.
These networks consist of over 100 Web sites that provide live event coverage,
historical databases, expert analysis and breaking news of many collegiate and
professional sports. In 1999, we expect to provide real-time coverage of over
4,000 sporting events on our networks. We use our proprietary technology in-
frastructure and business processes, which we call our business architecture,
to collect sports statistics and information once and disseminate this content
in customized formats through multiple distribution channels. For example, we
use this architecture to deliver our content to over 250 other Web sites
through our syndication partners. In addition to a unique and compelling user
experience, our Total Sports networks provide advertisers and merchants with
online sponsorship and e-commerce opportunities associated with specific
sports, leagues, teams and events. We also publish sports encyclopedias, fan
guides and other sports-related books which further establishes us as a sports
authority. Our number of page views have increased from approximately 38 mil-
lion in 1997 to approximately 515 million in the first nine months of 1999,
while the number of our sponsors and advertisers has grown from two in 1997 to
55 in the first nine months of 1999.

Industry Background

The Sports Market. According to the 1998 ESPN Chilton Sports Poll, 87% of the
U.S. population over the age of 12 consider themselves to be sports fans,
which we estimate is over 182 million sports fans. Interest in sports is in-
tense and the overall sports industry is large and growing. In 1995, according
to the Georgia Institute of Technology, spectator sporting events, the sale of
sporting goods and the sale of sports publications in the United States gener-
ated an estimated $130 billion. Each year, there are approximately 2,500 Major
League Baseball games, 5,000 NCAA Division I college basketball games, 700
NCAA Division I-A college football games and 200 professional golf events. Me-
dia coverage of these events provides businesses with an opportunity to pro-
mote their products and services to large audiences. Seven of the ten most
widely viewed television broadcasts in the 1998-99 television season were
sporting events, according to Nielsen Media Research. Sports-related televi-
sion advertising generated approximately $4.8 billion in 1998 and is estimated
to generate approximately $6.6 billion in 2003, according to Paul Kagan & As-
sociates. In addition, based on research conducted by Sponsorship Research In-
ternational, we estimate that in 1998, $13.2 billion was invested globally in
sports through the sponsorship of events, federations, teams, individuals and
stadiums.

The Internet. The Internet has emerged as a significant global communications
medium, enabling millions of people to access information and conduct commerce
electronically. The total number of Web users worldwide will increase from ap-
proximately 196 million in 1999 to 502 million by 2003, according to Interna-
tional Data Corporation. The Internet provides advertisers and merchants with
an attractive means of marketing and selling products and services either to a
mass audience or to a targeted demographic. The total value of products and
services sold over the Web is projected to increase from approximately $111.4
billion in 1999 to approximately $1.3 trillion by 2003, according to Interna-
tional Data Corporation. Advertising spending on the Internet is projected to
increase from $2.8 billion in 1999 to approximately $17.2 billion in 2003, ac-
cording to Forrester Research.

Sports on the Internet. The Internet provides sports enthusiasts access to re-
al-time scores and game summaries, extensive news coverage, statistics, analy-
sis and commentary before, during and after a sporting event. Sports-related
Web sites are the third most visited category on the Internet, and over 75% of
all Internet users have visited sports-related Web sites, averaging approxi-
mately 1.7 visits a day, according to Harris Black International. Internet us-
ers spend approximately 50% more time on sports-related Web sites and visit
these sites approximately 25% more often than other Web sites, according to
data collected by Media Metrix. Additionally, visitors to sports-related
Internet sites have higher household incomes and make more online purchases
than the average online adult, according to Cyberdialogue/findsvp.

34
<PAGE>

Opportunities For Online Sports Providers. The Internet provides the ability to
create a personalized, event-centered and comprehensive sports experience for
the user. Before, during and after a sporting event, sports enthusiasts can en-
gage in interactive event coverage, purchase event-specific merchandise and ac-
cess comprehensive sports information from a single online media source. The
popularity of sports on the Internet and the demographic attractiveness of the
audience offers multiple revenue-producing opportunities for merchants and
advertisers.

Traditional media such as newspapers, magazines, radio, television and 24-hour
sports cable channels do not offer a personalized, event-centered and compre-
hensive sports experience, nor do they incorporate interactive features. In ad-
dition, traditional media can only broadcast one event at a time and access by
fans is often limited by regional coverage. While several online providers, in-
cluding traditional media providers with an online presence, have emerged in
the sports category, we believe their presentation of programming and related
information tends to follow the traditional media model and consists of repack-
aging existing content into an online format. In addition, we believe most on-
line providers in the sports category have not developed the infrastructure
necessary to exploit the convergence of traditional media, the Internet and
other emerging digital technologies.

The Total Sports Solution

Total Sports provides an interactive, event-centered online sports experience,
which enables users to easily access and select real-time and other information
specific to events, teams, and athletes. Our Total Sports networks consist of
over 100 Web sites that provide live event coverage, historical databases, ex-
pert analysis and breaking news of many collegiate and professional sports. Our
business architecture, which combines technology and business processes, ena-
bles us to integrate interactive live event coverage, comprehensive and author-
itative sports content and e-commerce capabilities into our Total Sports net-
works and the Web sites of our syndication partners.

Benefits to Users. We have designed our event-centered sports coverage to meet
the needs of sports fans. Key benefits include:

. Real-Time Live Event Coverage. TotalCasts allow our users to experience
interactive, play-by-play, real-time coverage over the Internet. Our
TotalCasts provide graphical and textual presentations of live sporting
events that enhance a user's experience by offering a variety of real-time
charts, graphs and statistical analysis that we believe exceeds what is
offered by traditional and other new media coverage. Our statistical content
allows users to monitor and analyze the performance of teams and individual
players at any point during a sporting event. Our TotalCasts also offer
users real-time coverage of events which might not be broadcast locally.

. Comprehensive and Authoritative Sports Content. Our live event coverage is
enriched by our comprehensive sports-related news and information, including
our historical databases and archives, breaking news and expert analysis and
Web sites targeted to particular teams or conferences. We maintain databases
with statistical information on many sports. For example, we have a
searchable online baseball database with the complete records of the over
15,000 current and former Major League Baseball players. Users can access
and query this online repository of sports-related information and
statistics to follow their favorite teams and players. In addition, we have
partnered with Sports Illustrated to publish sports-related print titles and
have access to its archive of articles, books and photographs for use in
both online and traditional media. We publish the official encyclopedias for
Major League Baseball, the National Football League and the National Hockey
League.

. Convenient Shopping Experience. We provide users with the opportunity to
purchase sports merchandise online. We integrate specific team, school and
conference sport store fronts and other e-commerce offerings into our
TotalCasts and Total Sports networks. We also offer merchandise specifically
related to sporting events we TotalCast. Our users can easily select, order
and purchase merchandise before, during and after an event.

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Benefits to Partners. Our partners include online news and entertainment compa-
nies, broadcasters, leagues, athletic conferences and teams. Key benefits to
these partners include:

. Compelling Content. We have designed our event-centered sports coverage to
be compelling to users. Our content attracts and retains users for our
partners, creating additional advertising and e-commerce opportunities. In
particular, we believe that TotalCasts, which typically last between two and
three hours, retain users longer per visit than other online live event
coverage.

. Outsourced Sports Content Solutions. Our business architecture enables us to
provide outsourced online sports content solutions in a cost-effective
manner while maintaining our partners' brand integrity and the look and feel
of their Web sites. We use a series of internally developed templates
designed to help us quickly and efficiently tailor our sports content to our
partners' specific needs and preferences. By providing sports content
solutions, we offer an alternative to maintaining a large staff of reporters
and editors and technology infrastructure.

Benefits to Sponsors, Advertisers and Merchants. Key benefits include:

. Large and Targeted User Base. We provide sponsors, advertisers and merchants
a channel to reach a large and demographically attractive user base.
Furthermore, our Total Sports networks enable them to target users by sport,
region and other demographic categories, which allows sponsors, advertisers
and merchants to segment their target audience.

. Focused and Event-Centered Solutions. We allow sponsors, advertisers and
merchants to tailor the scope and duration of a particular campaign by
enabling them to focus on specific sports, leagues, teams, or events.
Merchants can capitalize on a sports fans' event-specific interests by
selling related merchandise directly during our event coverage. We also
design custom solutions for maximizing marketing and e-commerce
opportunities on the Web for our sponsors, advertisers and merchants.

Business Strategy

Our objective is to become the leading global sports new media company with a
focus on real-time live event coverage. To achieve our objective, we plan to:

Enhance and Further Monetize Our Content. We intend to grow our user base and
increase traffic to generate additional revenue by adding new sports networks,
expanding our existing sports networks and enhancing user functionality. We
plan to increase the content available on our five current sports networks as
well as launch new networks devoted to professional and collegiate sports in
the United States and internationally that are not currently covered in a com-
prehensive fashion. We will continue to enhance user functionality on our Total
Sports networks and use our databases to create enhanced content to make the
user experience broader and richer.

Strengthen Our Brand Recognition. We intend to make Total Sports synonymous
with authoritative, real-time, comprehensive sports content. We also will pro-
mote our other brands and trademarks, such as TotalCast, our real-time graphi-
cal and textual presentation of live sporting events; Powered by Total Sports,
our co-branded syndicated content offering; and Total Sports Illustrated, one
of our print publishing imprints. We intend to build our brands through online
and offline advertising, strategic alliances, and other promotional activities.
We will also continue to co-brand our content with leading syndication media
partners.

Capitalize on Our Technology Expertise. We believe our technology infrastruc-
ture and business processes provide us with an advantage as we enter new sports
categories, expand our strategic relationships, increase the syndication of our
content and capitalize on convergence opportunities. We believe that our capa-
bility to provide detailed, real-time sporting events coverage offers sports,
leagues and teams an attractive means to expand online coverage and promotion
of their events. In addition, our business architecture enables other strategic
partners, such as syndication partners, to access our compelling sports con-
tent. Our expertise also will position us to become a leader in integrating
video, audio, text and digital sports programming on a real-time basis over the

36
<PAGE>

Internet. As convergent technologies develop, we will be able to integrate the
data we collect through our TotalCast system as well as the related analysis
and graphical presentations using digital television, wireless or broadband
Internet technologies. In addition, we can deliver our content to a variety of
access devices, including PCs, hand-held devices, pagers and interactive tele-
vision. We intend to deliver our content to other devices as they develop.

Expand Strategic Relationships. We intend to expand our current and enter into
new strategic relationships to obtain additional content and distribution. We
plan to expand the scope of our existing relationships with major media compa-
nies, such as NBC Sports, and with professional and collegiate sports teams,
leagues and other sports organizations, such as Major League Baseball and the
NCAA, to broaden the reach of our online networks and gain access to additional
content. We will also seek to establish additional relationships with other
sports organizations and traditional and new media companies to secure rights
to additional content and events, both in the U.S. and internationally.

Grow Through Acquisitions. Since our inception, we have acquired and integrated
five businesses and we intend to continue pursuing acquisitions. We plan to
pursue acquisitions that broaden and deepen our statistical databases and con-
tent, enhance our e-commerce opportunities, supplement our existing technology
and provide an international presence.

Total Sports Business Architecture

Our proprietary technology infrastructure and business processes enable us to
collect sports statistics and information and distribute it in customized for-
mats on our Total Sports networks and to multiple distribution partners. This
business architecture allows us to rapidly collect sports content from a wide
variety of sources, convert the content into one master format, and then cus-
tomize and distribute that content quickly and efficiently. Total Sports has
successfully TotalCast over 7,000 live events since its launch in 1997. The
following schematic depicts our business architecture:

[CHART APPEARS HERE]

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Our business architecture consists of two primary components, the TotalCast
system and the Total Sports publishing system. The primary difference between
the two systems is the source and nature of the content initially flowing into
the systems.

TotalCast System

The TotalCast system receives data real-time from a sports event, processes the
information, so that it can be stored and manipulated in our databases and
then, using that data, creates graphical and textual descriptions and analysis
of the event. Our business architecture is comprised of three primary processes
that create the ability to reuse and redistribute Total Sports statistics and
information across many different platforms in many different ways.

. Collecting Real-Time Data. At the sports venue, our operators input data
relating to the sporting event into a computer that relays the information
to the company over the Internet. The computers used by our operators have
software featuring an easy-to-use graphical display, immediate quality
control feedback and artificial intelligence that knows the rules and
situations of each sport. We believe that the ease-of-use and intelligence
built into the software allow our operators to capture up to ten times more
data during the event than other data collection methods. The data is sent
real-time to our servers in a format ready for conversion.

. Converting the Data. The TotalCast system receives and immediately converts
the data into a format that can be stored in our databases and used to
create new content. The data conversion process will manage situations where
problems occur during an event. For instance, if there is an interruption in
service, once communications are re-established, the data conversion process
will synchronize all missing information and create new content. This
enables Total Sports to deliver accurate and complete coverage to its users
and to make available complete archives of events.

. Creating the Content. The content creation process immediately takes
information from the TotalCast database and creates multiple graphs,
statistical presentations and text pages per play during a sporting event.
The system can create many different presentations of each discreet event
like a pitch in baseball or a pass play in football. We believe that it
typically takes approximately ten seconds from the time the operator enters
the information into the computer at the sport venue to when all the
different presentations are available on the Internet.

The TotalCast system also can integrate audio files, video files and still pho-
tographs or deliver that content separately to our network of Web sites, those
of our syndication partners and a variety of other access devices.

Total Sports Publishing System

The Total Sports publishing system enables us to receive data and information
from many sources in multiple formats and convert, manipulate and distribute
this data in different forms on the Total Sports network or the Web sites of
our syndication partners. The system also allows us to rapidly repackage con-
tent into one of more than 100 different templates each with a different look,
feel and presentation.

. Collecting Data. The publishing system receives news, statistics and other
content from multiple sources in different formats, including email,
computer files, facsimiles, proprietary data formats, news or sports wire
transmissions, photographs and satellite data streams. The system can
process tens of thousands of data files per day.

. Converting the Data. The publishing system converts this diverse stream of
information into a format that can be stored in our databases and used to
create new content. As part of this process, the system knows the
contractual rules for each source of information. For instance, some wire
services will allow Web sites to display stories for a certain period of
time before they must be removed from the Web site. The data conversion
process automatically ensures that all content is used consistently with any
relevant contractual provisions.

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. Creating the Content. Editors, either from Total Sports or our affiliates
and partners, can adjust the display, change headlines, or change the
display priority of any content on their respective Web sites. The system
creates Web pages to conform to the look and feel of each Total Sports
affiliate and partner. The content creation process can display a story in
more than 100 different formats.

Both the TotalCast system and the publishing system are designed to handle
rapid changes in design and load. The architecture can accommodate new affili-
ates and partners and increased traffic levels without slowing down our ability
to update Web sites, limiting our customers' ability to change their site or
changing the user's experience. The architecture is also designed to distribute
our content to various non-Internet devices such as in-venue displays, pagers,
mobile computers, cellular phones and hand-held computing devices, as well as
our traditional publishing unit.

Products and Services

We provide users access to our TotalCasts and other live event simulcasts, our
searchable archives of sports- related news, statistics and analysis and mer-
chandise related to their favorite teams, players and events throughout our To-
tal Sports networks and on the Web sites of our syndication partners. In addi-
tion, we publish sports encyclopedias, fan guides and other sports-related ti-
tles.

Total Sports networks

Our five Total Sports networks provide users with comprehensive online sports
programming encompassing both collegiate and professional sports. Our Total
Sports networks are centered around extensive live event coverage. These net-
works consist of more than 100 Web sites, which users can access directly or
through our navigational hubs www.totalsports.net and www.totalsports.com. Our
networks feature:

. interactive live event coverage;

. up-to-date general sporting news and editorials;

. streaming audio and video;

. constantly updated scoreboards; and

. e-commerce storefronts.

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<PAGE>

The following chart identifies our five Total Sports networks, including se-
lected Web sites and content features:

Sports Networks Selected Web sites Content Features
- --------------------------------------------------------------------------------
Total College Sports TotalCollegeSports.com . Official Web sites and
Network FinalFour.net TotalCasts for NCAA
NCAA Football.net championships,
NCAA Baseball.net including the Final
SECSports.com Four and the College
Big10Championships.com World Series
GoDuke.com . TotalCasts of
Riceowls.com conference and
university sporting
events
. University and
conference Web sites
. Official university
and conference online
stores
- --------------------------------------------------------------------------------
Total Baseball Network TotalBaseball.com . TotalCasts of all
TotalWorldSeries.com spring training,
regular season,
playoff and World
Series games
. Searchable database
for statistics on all
15,000 current and
former MLB players
. Standings, schedules,
statistics, news
- --------------------------------------------------------------------------------
Total Golf Network Golf.com . TotalCasts of
Pinehurst99.com tournaments
. Instruction, news,
schedules
. Equipment sales
- --------------------------------------------------------------------------------
Total Racing Network Motortrax.com . Streaming NASCAR pit
crew/driver
conversation
- --------------------------------------------------------------------------------
Total SportFishing worldbillfishseries.com . Simulcast of World
Network thebigrock.com Billfish Series
buddydavis.com . General sportfishing
information

Live Events

We provide real-time, live event coverage on our Total Sports networks and the
Web sites of our syndication partners in the form of TotalCasts and other si-
mulcasts.

A TotalCast is a rich, graphical and textual real-time presentation of live
sporting events over the Internet that simulates a spectator's experience. Each
TotalCast incorporates real-time scoring updates, detailed textual play-by-play
descriptions and comprehensive statistical updates in an integrated, easy-to-
use, interactive format. The TotalCast functionality allows a user to search
for and analyze statistics for teams or individual athletes throughout the
event. Our proprietary data collection system enables us to capture a signifi-
cant number of discrete events creating a dynamic user experience. Our
TotalCast navigational system enables users to easily access integrated chan-
nels featuring statistics, graphical depictions of real-time events, rosters
and general sporting news. Our TotalCasts of collegiate and professional sports
include:

. Baseball. Our baseball TotalCast collects 210 categories of statistical
information, compared to a standard 18-category box score. We offer our
users a graphical representation of a player at-bat and the location of each
pitch. We also allow users to track each player's at-bats by inning. In
addition, we provide a graphical representation of the baseball field and
categorize each ball in play, such as grounders, line drives, pop-ups, fly
balls and home runs.

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. Basketball. Our basketball TotalCast collects over 50 categories of
statistical information on each discrete event in a game, including every
shot made or missed, assist, rebound, steal, turnover, blocked shot and
foul. Each of these discrete events is recorded in both a play-by-play
textual summary and charted by location on the court. Our basketball
TotalCast includes photographs from cameras in various locations, including
a "Slam Cam" located above the backboard.

. Football. Our football TotalCast tracks over 110 statistics for each athlete
and team including passing yardage, rushing yardage, first downs, points
scored, touchdowns, field goals, turnovers, penalties and kick returns. We
graphically display each possession which can have any of 14 possible
outcomes, and summarize possessions in each quarter. Our system-generated
text provides a description of each play that includes information such as
players' full names, commentary on passing styles and plays, and game
summaries.

. Golf. Our golf TotalCast collects information on each player in a
tournament, including every shot, the distance traveled, the club used,
information about greens, fairways, putts, sandsaves and the actual x and y
coordinates of every shot hit. This allows the TotalCast to display the
actual beginning and ending point of every shot in real-time. We also
provide information about the course, including full statistical and
pictorial descriptions of each hole. Throughout the tournament, users can
track the complete statistics on each individual player's round. Users can
compare different players' performance on the same hole. After each round, a
statistical summary is created, combining highlights and statistics. A
continuously updated leader board keeps track of all individual rounds in
progress.

In addition to our TotalCasts, our business architecture allows us to provide
other forms of live event coverage over the Internet. For example, users can
listen to NASCAR drivers' conversations with crew chiefs during races. Total
Sports is the licensed provider of streaming audio of these conversations over
the Internet. In addition our users can also follow the progress of fishing
tournaments over the Internet.

Since our inception, we have provided live event coverage through both our
TotalCasts and other simulcasts for over 7,000 live sporting events including
the following: Major League Baseball games; the NCAA Championship men's and
women's basketball tournaments; and NASCAR races. We covered over 240 live
events in 1997, over 3,000 in 1998 and expect to cover over 4,000 in 1999. We
estimate that over one million users viewed TotalCasts of 1999 NCAA Champion-
ship men's basketball tournament games.

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<PAGE>

Syndication

We syndicate content to the Web sites of both traditional and new media part-
ners under our Powered by Total Sports brand. Syndication ranges from basic
distribution of content to the creation, maintenance and management of Web
sites. Our scalable, flexible business architecture efficiently integrates our
content with that of our syndication partners to provide continuously updated,
dynamic content. Our different types of syndication are described below:

<TABLE>
<CAPTION>
Type of Syndication Representative Partners Description
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Basic distribution . Associated Press Syndicate Total Sports
content to over 250 Web sites
through the AP's "The Wire"
service
- -------------------------------------------------------------------------------------------
TotalCast syndication . Regional and local Provide links to TotalCast
newspapers
. MSNBC
. Houston Astros
. San Diego Padres
- -------------------------------------------------------------------------------------------
Site creation, maintenance . AOL.com Design, provide and manage
and management . Wall Street Journal the
. Los Angeles Times content for the sports
section of
Web sites
</TABLE>

E-Commerce

Our event-focused programming and Total Sports networks generate a demographi-
cally attractive audience that provides e-commerce opportunities to sponsors,
advertisers and merchants. We provide access to 17 online stores offering a
range of sporting goods and merchandise, including the Golf.com pro shop; a
Web site selling our print titles; and Web sites for the NCAA Final Four, the
SEC, Duke University, the University of Texas, and University of Arizona. Our
event-focused programming offers a targeted channel for online marketing and
sales. For example, the moment the 1999 NCAA Championship men's basketball
tournament ended, we promoted and sold national champion merchandise featuring
the winning team. Total Sports customers can place and track an order through
our Web sites as well as through our customer service, which can be reached by
email or by calling our toll free customer service number 1-877-I AM A FAN.

As a leading sports publisher, we publish sports reference books, including
the official league encyclopedias for three of the four major professional
leagues, and other sports-related books including fan guides, histories, biog-
raphies and statistical compilations. We have a relationship with Sports Il-
lustrated, under which we publish books under our co-branded Total Sports Il-
lustrated imprint and have access to Sports Illustrated's news and photograph
archives. In addition, we have a relationship with USA Today under which we
publish books for Baseball Weekly. The following is a representative list of
our books we either published or authored:

Encyclopedias: Total Baseball, Total Football, Total Hockey

Fan Guides:
USA Today Baseball Weekly Insider, Total Mets,
Total Braves, Total Indians, Total Browns,
Total Cowboys, Total 49ers, Total Steelers,
Total Super Bowl

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Histories and Biographies:
Years of Glory, The Commissioners, East
Side/West Side, The World According to Dean
(Dean Smith), The Babe, Home Run--My Life in
Pictures (Hank Aaron), Number 99--My Life in
Pictures (Wayne Gretzky), Greatest Athletes of
the 20th Century, Sports Illustrated Almanac,
Smoke--The Romance and Lore of Cuban Baseball,
20th Century Sports, Book of Boxing

Statistics and Abstracts:Hidden Game of Football, USA Today Baseball
Weekly Almanac

Strategic Relationships

We have entered into relationships with strategic partners that enhance our
content, distribution and promotion, including the following:

NBC Sports. Our relationship with NBC Sports encompasses promotion and distri-
bution arrangements as well as an equity investment. If we have rights to
TotalCast an NBC-televised sporting event (other than the Olympics), then NBC
Sports will exclusively promote our TotalCast during its broadcast of the
event. NBC Sports will promote our TotalCasts in a variety of ways, which may
include announcer-read, in-context, promotional mentions and in-broadcast
graphics. NBC Sports will direct users to Web sites owned, co-owned or con-
trolled by NBC Sports from which users can access our live event coverage. We
believe that the NBC Sports on-air promotion will significantly increase traf-
fic to our Web sites and awareness of our TotalCast brand. NBC Sports also has
agreed to use commercially reasonable efforts to assist us in securing advanta-
geous promotion and distribution on NBC Sports' affiliated Web site properties,
including MSNBC.com and any dedicated NBC Sports Web site other than its Olym-
pics sites. Our agreement with NBC Sports is for 51 months beginning in Novem-
ber 1999, subject to earlier termination for breach or, in limited cases, upon
a change of control of Total Sports. In the case of a termination upon a change
of control, NBC Sports would not have to pay us any money or return the Total
Sports stock we issued to NBC Sports. In addition, NBC Sports has the right to
pay us cash or return Total Sports stock we issued to them instead of providing
us promotion under the agreement. NBC Sports is also an equity investor, along
with Total Sports, in Golf.com.

National College Athletic Association and Collegiate Athletic Conferences. Our
relationships with both the NCAA and collegiate conferences provide us with
content for our college sports and NCAA championship networks. Through our
partner, Host Communications, we have the exclusive rights, through June 30,
2001, to host Web sites for and to TotalCast all 81 championship tournament
events for the NCAA. We have separate relationships with several collegiate
conferences and organizations, including the Southeastern Conference, the Big
Ten, the Big 12, the Big East and the National Association of Intercollegiate
Athletics. Typically for such conferences, Total Sports has the exclusive
rights to host their Web site, to provide TotalCasts of all conference tourna-
ment or championship events, host an online store selling conference merchan-
dise and to access to all conference photograph, video, audio, statistical and
print libraries.

Major League Baseball. Major League Baseball has licensed online and print pub-
lishing rights to us. We hold a license to TotalCast the over 2,400 major
league games played each year, including spring training exhibition games, the
All-Star game, the playoffs and the World Series. This license runs through
2001 and includes the right to use and display statistics. Since 1995, we have
published the official Major League Baseball encyclopedia, Total Baseball, and
we have rights to continue publishing this title through November 2000.

Sports Illustrated. We have a relationship with Sports Illustrated through
which we publish books under our co-branded Total Sports Illustrated imprint
and have access to the magazine's news and photograph archives. We believe that
this relationship enhances our status as a sports authority.

Sales and Marketing

Sales

As of September 30, 1999, we had a sales force consisting of six sales profes-
sionals and we plan to add additional sales personnel by the end of 1999. Our
sales effort is organized geographically with offices in New York, Toronto, San
Jose, and Washington D.C. Our sales force maintains a close relationship with
our sponsors and advertisers by consulting regularly with them on design and
placement of their advertising and offering a high level of customer support.
Our Total Sports networks and event-focus enable sponsors to target on multiple
levels

43
<PAGE>

including by sport, region, team, event or other parameters. In addition, we
design custom advertising solutions for clients seeking to extend marketing
campaigns and merchandising opportunities across offline and online media.

During the nine months ended September 30, 1999, 55 unique advertisers, an in-
crease of approximately 96% over the nine months ended September 30, 1998,
sponsored events or placed advertisements on the Total Sports networks. Compaq
and GTE accounted for approximately 6.6% and 6.1%, respectively of our revenues
for the nine months ended September 30, 1999. The following is a representative
list of our significant sponsors and advertisers:

. American Express Company . General Motors Corporation

. Andersen Consulting . GTE Corporation

. Compaq Computer Corporation . Marriott International, Inc.

. Continental Airlines, Inc. . Mastercard International
Corporation

. Daimler Chrysler AG
. MBNA America Bank, N.A.

. EA Sports
. PepsiCo, Inc.

. eBay, Inc.
. Travelocity

Marketing

We employ a variety of online and offline advertising campaigns to promote our
brands, generate additional traffic and attract new users to our Total Sports
networks. We recently entered into a relationship with NBC Sports which will
provide us with on-air promotion on NBC Sports television broadcasts. We have
primarily relied upon promoting and marketing Total Sports through our online
syndication relationships with AOL.com, the Wall Street Journal, the Associated
Press and the Los Angeles Times. These relationships have allowed us to estab-
lish our Powered by Total Sports brand and reach a mass consumer market. Our
branded content is also promoted by links on major search engines such as Ya-
hoo!, Altavista and Excite. Our print marketing has primarily targeted sponsors
and advertisers with advertisements in sports trade publications, including the
Street and Smith Sports Business Journal. Our branded books, encyclopedias and
reference guides help promote the Total Sports brand as a sports authority. We
will continue to pursue relationships that will expand our audience and enhance
our brand awareness.

Competition

We compete for users, advertisers and rights to sporting events with many other
entities, such as:

. Web sites targeted to sports enthusiasts generally, Web search and retrieval
services and other high traffic Web sites, which provide access to sports-
related content and services, many of which have been established by
traditional media companies;

. Web sites targeted to enthusiasts of particular college or professional
sports, some of which have the advantage of being the official site for a
given league, team, event or institution;

. vendors of sports information, merchandise, products and services
distributed through other means, including retail stores, mail, facsimile
and private bulletin board services; and

. television, radio and other established media entities that broadcast
sporting events.

We believe that the principal competitive factors in attracting and retaining
users are:

. the depth, breadth, and timeliness of sports content;

. brand recognition; and

. ease of use and quality of services.

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<PAGE>

We anticipate that, as the Internet and other interactive distribution systems
converge with traditional television broadcasting and cable, significant compe-
tition may come from the providers of broadband networks, including sports-ori-
ented cable networks. Some of our existing competitors, as well as a number of
potential new competitors, have longer operating histories, greater name recog-
nition, larger customer bases and significantly greater financial, technical
and marketing resources than we do. Others might develop technologies and serv-
ices that are similar or superior to ours. We expect that the number of our di-
rect and indirect competitors will increase in the future and this may ad-
versely affect our business, operating results and financial condition. In-
creased competition could result in lower advertising rates and loss of users,
market share and advertising and sponsorship opportunities, any of which could
materially and adversely affect our business, operating results and financial
condition.

Infrastructure, Operations and Technology

Our operating infrastructure is designed to provide timely, efficient and reli-
able delivery of our content for the benefit of our users, syndication part-
ners, sponsors and advertisers. We use Solaris as an operating system and En-
terprise and Apache Webserver and Netscape Fast Track as Web server software.
Total Sports' technology infrastructure integrates commercial and company-de-
veloped software. All of our internally developed applications utilize Java En-
terprise and interact with various third-party applications licensed by Total
Sports, including Oracle's database software. We intend to add capacity and
functionality as required to meet usage demands.

Frontier Global Center hosts our production servers at its Herndon, Virginia
facility. Frontier Global Center provides comprehensive facilities management
services including human and technical monitoring of all production servers 24
hours per day, seven days per week. Frontier provides the means of connectivity
for Total Sports' servers to end-users via the Internet through high capacity
transmission wires. These connections link to many different parts of the
Internet via a combination of public and private peering agreements. The facil-
ity has at least two independent uninterruptible power supplies, which are bat-
tery-powered, as well as at least two independent diesel generators designed to
provide power to these systems within seconds of a power outage. The diesel
generators can supply the data center's power for nine days before refueling is
required. Any disruption in the Internet access provided by Frontier could ma-
terially adversely affect our business, results of operations and financial
condition.

Governmental Regulation and Legal Uncertainties

The laws governing the Internet remain largely unsettled, even in areas where
there has been some legislative action. It may take years to determine whether
and how existing laws, including those governing intellectual property, priva-
cy, libel and taxation, apply to the Internet generally and the electronic dis-
tribution of business information in particular. Legislation could reduce the
growth in the use of the Internet generally and decrease the acceptance of the
Internet as a communications and commercial medium, which could materially ad-
versely affect our business, operating results and financial condition. In ad-
dition, the growing popularity and use of the Internet has burdened the exist-
ing telecommunications infrastructure and many areas with high Internet usage
have begun to experience interruptions in phone service. As a result, some lo-
cal telephone carriers have petitioned governmental agencies to regulate
Internet service providers and online service providers in a manner similar to
long distance telephone carriers and to impose access fees on Internet service
providers and online service providers. If any of these petitions or the relief
that they seek is granted, the costs of communicating on the Internet could in-
crease substantially, potentially adversely affecting the growth in the
Internet.

Tax authorities in a number of states are currently reviewing the appropriate
tax treatment of companies engaged in electronic commerce. Therefore, we might
become subject to additional state sales and income taxes. Because our content
is available over the Internet in multiple states and foreign countries, these
jurisdictions may claim that we are required to qualify to do business as a
foreign corporation in each such state and foreign country. Failure by us to
comply with foreign laws or to qualify as a foreign corporation in a jurisdic-
tion where we are required to do so could subject us to taxes and penalties for
the failure to qualify and could result in our inability

45
<PAGE>

to enforce contracts in such jurisdictions. Any such new legislation or regu-
lation, or the application of laws or regulations from jurisdictions whose
laws do not currently apply to our business, could subject us to additional
taxes or penalties.

Intellectual Property

We rely primarily on a combination of copyrights, trademarks, trade secret
laws, our user policy, licensing agreements and restrictions on disclosure to
protect our intellectual property. Despite these precautions, it may be possi-
ble for a third party to copy or otherwise obtain and use the content on our
Web sites or our other intellectual property without authorization. Our pre-
cautions might not prevent misappropriation or infringement of our intellec-
tual property. Failure to protect our intellectual property in a meaningful
manner could materially adversely affect our business, operating results and
financial condition. In addition, we may need to engage in litigation in order
to enforce our intellectual property rights in the future or to determine the
validity and scope of the proprietary rights of others. Any litigation could
result in substantial costs and diversion of management and other resources,
either of which could materially adversely affect our business, operating re-
sults and financial condition.

Because we license and receive a substantial amount of our data and content
from third parties, our exposure to copyright infringement actions might in-
crease. We rely upon these third parties as to the origin and ownership of li-
censed content. We generally obtain representations as to the origins and own-
ership of licensed content and generally obtain indemnification to cover any
breach of any representations. However, these representations might not be ac-
curate and indemnification might not be sufficient to provide adequate compen-
sation for any breach of these representations.

Others might assert infringement or other claims against us, whether resulting
from our internally developed intellectual property or licenses or content
from third parties. Any future assertions or prosecutions could materially ad-
versely affect our business, operating results and financial condition. Any
claims, with or without merit, could be time-consuming, result in costly liti-
gation and diversion of technical and management personnel or require us to
introduce new content or trademarks, develop non-infringing technology or en-
ter into royalty or licensing agreements. These royalty or licensing agree-
ments, if required, might not be available on acceptable terms, if at all. In
the event a claim of infringement is successful and we fail or are unable to
introduce new content, develop non-infringing technology or license the in-
fringed or similar technology on a timely basis, our business, operating re-
sults and financial condition could be materially and adversely affected.

Employees

As of September 30, 1999, we employed 149 full-time employees, consisting of
18 in sales and marketing, 22 in finance and administration, 65 in product de-
velopment and 44 other employees. In addition, we engage as independent con-
tractors free-lance reporters, statisticians, photographers, camera operators
and editors. As we continue to grow, we expect to hire more personnel. None of
our current employees are represented by a labor union. We believe that our
relationship with our employees is good. Competition for qualified personnel
in our industry is intense.

Properties

We are headquartered in Raleigh, North Carolina, with leased office space in
New York, New York and Kingston, New York. Our principal facility, into which
we relocated in August 1999, consists of approximately 27,000 square feet. The
lease for this facility will expire in June 2009. The Kingston, New York lease
covers approximately 16,800 square feet of office and warehouse space and will
expire in September 2000.

Legal Proceedings

We are not currently subject to any material legal proceedings.

46
<PAGE>

Management

Executive Officers and Directors

The following table contains information concerning our executive officers and
directors as of September 30, 1999:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name Age Position(s)
- ---- --- ----------
<S> <C> <C>
Frank A. Daniels, III... 43 Chairman of Board of Directors and Chief Executive Officer
George Schlukbier....... 48 President and Chief Operating Officer
Colin Boatwright........ 26 Chief Technology Officer
John Thorn.............. 52 Publisher
Petra Weishaupt......... 34 Controller
Eric Harris............. 43 Vice President, Operations
Marie Hasnain........... 38 Vice President, Sales
Ezra Kucharz............ 31 Vice President, Business Development
Frank A. Daniels, Jr.... 68 Director
Charles L. Jarvie(2).... 62 Director
William W. Neal,
III(1)................. 67 Director
Robert S. Prather,
Jr.(1)................. 55 Director
William E. Ray(1)....... 50 Director
Stuart B. Rekant(2)..... 49 Director
Gary R. Stevenson(2).... 42 Director
</TABLE>

- ----------------
(1)Member of the compensation committee
(2)Member of the audit committee

Frank A. Daniels, III has served as our Chairman and Chief Executive Officer
since our founding in March 1997. From 1990 to 1995, Mr. Daniels served as Vice
President, Executive Editor and Director of The News and Observer in Raleigh,
North Carolina. From August 1995 to May 1996, Mr. Daniels served as President
and Publisher of Nando.net, an integrated digital publishing and internet serv-
ices company. In January 1996, Mr. Daniels founded KOZ inc., the predecessor
company of Total Sports, a builder of community and group publishing systems,
where he currently serves as chairman of the board. Mr. Daniels currently
serves on the board of Cadmus Communications Co. and the boards of directors of
a number of privately held companies. Mr. Daniels serves as a director at the
designation of our management pursuant to the terms of a voting agreement that
will terminate upon the closing of this offering.

George Schlukbier has served as our President since our founding in March 1997
and became our Chief Operating Officer in October 1999. From May 1996 to March
1997, Mr. Schlukbier served as President of KOZ inc. Mr. Schlukbier served at
Nando.net from August 1993 to May 1996 in the position of director of new me-
dia. Previously he served as the coordinator of the corporate new product de-
velopment team at McClatchy Newspapers. Mr. Schlukbier also has 14 years' expe-
rience of running his own information consulting service, Info Bank, in Toron-
to, Canada.

Colin Boatwright has served as our Chief Technology Officer since our inception
in March 1997. Prior to joining us, Mr. Boatwright served as vice president of
technology of KOZ inc. from May 1996. Mr. Boatwright also served as chief tech-
nologist at Nando.net from March 1995 to May 1996. Prior to that time, Mr.
Boatwright was a full-time student at North Carolina State University.

John Thorn created and oversees our print publishing program and has served
with us as publisher since March 1997. He was instrumental in developing Total
Baseball and Total Football and served as chief consultant to Ken Burns' 18
1/2-hour PBS film, Baseball. Mr. Thorn is a consultant to the Veterans Commit-
tee of the Baseball Hall of Fame and originally created our award-winning Web
site, www.totalbaseball.com. For the 12 years prior to joining us, Mr. Thorn
headed his own book packaging and digital-services companies, Baseball Ink and
Total Baseball.

47
<PAGE>

Petra Weishaupt has served as our Controller since March 1997. Prior to joining
us, Ms. Weishaupt served as Assistant Controller of BSG, Inc., an international
software integration company and subsidiary of Medaphis, Inc., from July 1996
to March 1997, a financial analyst for Maxm Systems Corporation, a software de-
velopment company, from February 1995 to July 1996, and as an accounts receiv-
able executive for Seer Technologies, Inc., a software company, from January
1994 to February 1995. From January 1991 to December 1993, she served at Ernst
& Young International in both Stuttgart, Germany and Raleigh, North Carolina as
a senior accountant and consultant.

Eric Harris has served as our Vice President of Operations since our inception
in March 1997. Prior to joining us, Mr. Harris served as editor of KOZ inc.
from June 1996. Mr. Harris served at Nando.net from February 1994 to June 1996
as Vice President of Operations. Before joining Nando.net, Mr. Harris worked in
a variety of capacities at several newspapers for 20 years.

Marie Hasnain has served as our Vice President, Sales since March 1998. Ms.
Hasnain has over 15 years of advertising and marketing experience in magazines,
newspapers and on-line products. She was previously the Director of Sales and
Marketing for The Toronto Star in their new media division from September 1997
to March 1998, and also was employed in various capacities from 1989 to Septem-
ber 1997 with The Globe and Mail newspaper in Canada, most recently serving as
the director of sales and marketing for its Internet new media division.

Ezra Kucharz is a founder of Total Sports and has served as Vice President of
Business Development since our inception in 1997. From April 1997 to January
1998, he also served as Chief Executive Officer of Total College Communications
Company. Prior to joining us, Mr. Kucharz co-founded and served as Chief Execu-
tive Officer of Applied New Technologies from August 1995 until it was acquired
by KOZ inc. in May 1996. From December 1990 to August 1994 Mr. Kucharz was an
engineer for Long Life Sciences at the NASA Johnson Space Center. Mr. Kucharz
has extensive experience in online production, project management and support.

Frank A. Daniels, Jr. has served as a director since June 1997. Mr. Daniels is
the retired President and Publisher of the News & Observer Publishing Company,
where he served in many capacities since beginning his career in publishing and
media in 1953, culminating in his retirement in 1996. Mr. Daniels also served
as chairman of the board of directors for the Associated Press from 1992 to
1997, and he remains president of the Philanthropy Journal of North Carolina, a
monthly non-profit publication he helped found in 1994. Mr. Daniels has been
and continues to be civically involved in the Raleigh area. Mr. Daniels serves
as director at the designation of our management pursuant to the terms of a
voting agreement that will terminate upon the closing of this offering.

Charles L. Jarvie has served as a director since June 1998. He has served as
President of Host Communications, Inc. since 1993. Mr. Jarvie currently serves
on the board of directors of Rawlings Sporting Goods Co., Inc. Mr. Jarvie
serves as our director at the designation of Host Communications pursuant to
the terms of a voting agreement that will terminate upon the closing of this
offering.

William W. Neal has served as a director since January 1998. He has served as
Managing Principal of Piedmont Venture Partners Limited Partnership since July
1996. Prior to joining Piedmont Venture Partners, Mr. Neal served as President,
Chief Executive Officer and later Chairman of Broadway & Seymour, a provider of
information technology solutions to the financial services industry from July
1989 until July 1996. Mr. Neal has also served as a General Partner with the
New York venture capital and buyout firm of Welsh Carson Anderson & Stowe. Mr.
Neal currently serves on the board of directors of Health Management Systems,
as well as other privately held portfolio companies of Piedmont Venture Part-
ners. Mr. Neal serves as a director at the designation of Piedmont Venture
Partners pursuant to the terms of a voting agreement that will terminate upon
the closing of this offering.

Robert S. Prather, Jr. has served as a director since August 1998. Since 1992
he has served as President of Bull Run Corporation, a holding company with in-
vestments in various media and sports-related companies. Mr. Prather served at
Fuqua Industries from 1961 through 1980, with his last position as Vice Presi-
dent of Corporate Development. Mr. Prather serves as a director at the designa-
tion of Bull Run pursuant to the terms of a voting agreement that will termi-
nate upon the closing of this offering.

48
<PAGE>

William E. Ray has served as a director since November 1997. Mr. Ray founded
Raycom Sports in 1979 with his wife, Dee, and built Raycom Sports into one of
the largest collegiate sports production and syndication companies in the coun-
try. In 1997, the Rays sold Raycom Sports and Mr. Ray retired as President. Mr.
Ray continues his involvement in sports media through various business ventures
and investments. Mr. Ray serves as a director at the designation of Nuray
Telluride Properties Limited Partnership pursuant to the terms of a voting
agreement that will terminate upon the closing of this offering.

Stuart B. Rekant has served as a director since August 1998. Mr. Rekant is co-
founder, and since June 1994, has served as President, of Winstar New Media
Company, Inc., where he is responsible for developing and managing the media
and information services division. Since July 1998, Mr. Rekant has also served
as the chief executive officer and vice-chairman of Office.com Inc. Both
Winstar New Media and Office.com Inc. are subsidiaries of Winstar Communica-
tions, Inc. Prior to joining Winstar New Media, Mr. Rekant worked for more than
20 years in senior programming and finance positions in the entertainment and
media industries for companies including U.S. News and World Report, Miramax
Film Corp., Home Box Office, Inc., Management Company Entertainment Group, Inc.
and Independent Production Resources, Inc. Mr. Rekant serves as a director at
the designation of Winstar Interactive Ventures, Winstar's subsidiary that
makes investments in online properties, pursuant to the terms of a voting
agreement that will terminate upon the closing of this offering.

Gary R. Stevenson has served as a director since May 1997. Mr. Stevenson cur-
rently owns a sports marketing and television consulting practice, Stevenson
Marketing and Media, that specializes in strategic planning and business devel-
opment for corporate clients and sports properties rightsholders, which he
founded in October 1995. Mr. Stevenson served as President of NBA Properties
Marketing and Media Group from August 1996 to August 1997, and during that time
he was the architect of the strategy and business plan for the formation and
launch of the Women's National Basketball Association. Mr. Stevenson also
served in various capacities in the professional golf industry at both the PGA
Tour and the Golf Channel for 11 years prior to joining the NBA Properties Mar-
keting and Media Group, recently as a chief executive officer of the Golf Chan-
nel from August 1994 to October 1995. Mr. Stevenson serves as a director at the
designation of management pursuant to the terms of a voting agreement that will
terminate upon the closing of this offering.

There are no relationships that exist between our officers and directors except
that Frank A. Daniels, III is the son of Frank A. Daniels, Jr.

Board of Directors and Committees

Our board of directors is currently composed of eight members. Each director
holds office until the next annual meeting of the stockholders or until his
successor is duly elected and qualified. Our amended and restated certificate
of incorporation and amended and restated bylaws will provide that, beginning
with the first meeting of the board of directors following this offering, the
board of directors will be divided into three classes, with each class serving
staggered, three-year terms. Class I will consist of Messrs. , and
, who will stand for election at the annual meeting of stockholders to be
held in 2000. Class II will consist of Messrs. , and , who will
stand for election at the annual meeting of stockholders to be held in 2001.
Class III will consist of Messrs. , and , who will stand for
election at the annual meeting of stockholders to be held in 2002. There are
currently three vacancies on the Board of Directors. In connection with our
agreement with NBC Sports and our Series D preferred stock financing, each of
NBC Sports, TCV III and Zilkha Capital Partners have the right to designate a
director to fill these vacancies. The amended and restated bylaws of the corpo-
ration will provide that directors can be removed only for cause by holders of
at least 66 2/3% of our common stock. Officers are chosen by, and serve at the
discretion of, the board of directors.

The board of directors has created a compensation committee and an audit com-
mittee. The compensation committee makes recommendations to the board of direc-
tors concerning salaries and incentive compensation for our officers and em-
ployees and administers our stock option plans. The members of the compensation
committee are Messrs. Prather, Jr., Ray and Neal. The audit committee makes
recommendations to the board of directors regarding the selection of indepen-
dent auditors, reviews the results and scope of audits and other accounting-re-
lated services and reviews and evaluates our internal control functions. The
members of the audit committee are Messrs. Rekant, Stevenson and Jarvie.

49
<PAGE>

Director Compensation

Prior to this offering, we issued a nonstatutory stock option exercisable for
300 shares, at an exercise price of $0.01 per share, to each member of our
board of directors for each meeting attended by that director. In addition,
each director was reimbursed for his reasonable out-of-pocket expenses incurred
in connection with attending meetings of the board of directors. We anticipate
that, for an undetermined period following this offering, our directors will
not be paid any fees or compensation for service as members of the board of di-
rectors or any committee thereof, but will be reimbursed for any reasonable
out-of-pocket expenses incurred in connection with attending meetings of the
board of directors and any committees thereof. In addition, directors who are
not our employees will periodically receive automatic grants of non-qualified
options under our stock plan.

Limitation of Liability and Indemnification Matters

Our bylaws provide for mandatory indemnification of directors and officers to
the fullest extent permitted by Delaware law. Prior to consummation of this of-
fering, we intend to obtain additional directors' and officers' liability in-
surance and expect to enter into indemnification agreements with all of our di-
rectors and executive officers. In addition, our certificate of incorporation
limits the liability of our directors to us or our stockholders for breaches of
the directors' fiduciary duties to the fullest extent permitted by Delaware
law.

Compensation Committee Interlocks and Insider Participation

Our compensation committee consists of Messrs. Prather, Jr., Ray and Neal. No
member of the compensation committee serves as our officer or employee. No mem-
ber of the compensation committee serves as a member of the board of directors
or compensation committee of any entity that has one or more executive officers
serving as a member of our board of director or its compensation committee.

50
<PAGE>

Executive Compensation

The following table presents information concerning the cash and non-cash com-
pensation during the fiscal year ended December 31, 1998 of our chief executive
officer and our four other most highly compensated executive officers, who we
refer to in this prospectus as the named executive officers.

Summary Compensation Table

<TABLE>
<CAPTION>
--------------------------------------------
Long-Term
Annual Compensation Compensation Awards
-------------------- -----------------------
Securities All Other
Underlying Compensation
Name and Principal Positions Salary ($) Bonus ($) Options ($)
- ---------------------------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Frank A. Daniels, III.......... $ -- $ -- -- $ --
Chairman and Chief Executive
Officer
George Schlukbier.............. 130,796 -- 1,641 1,910(1)
President and Chief Operating
Officer
John Thorn..................... 103,248 25,000 1,513 3,403(1)
Publisher
Ezra Kucharz................... 103,846 -- 1,513 2,769(1)
Vice President, Custom
Marketing Solutions
Eric Harris.................... 101,565 -- 1,513 2,538(1)
Vice President, Operations
</TABLE>
- ---------------
(1) Represents company matching on named executive officers' 401(k) contribu-
tions.

The following table presents information regarding stock options granted to
each named executive officers during the fiscal year ended December 31, 1998.

Option Grants in Last Fiscal Year

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Individual Grants
----------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Number of Stock Price
Securities % of Total Appreciation
Underlying Options Granted for Option Term(1)
Options Granted to Employees Exercise Price Expiration -----------------------
Name (#) in Fiscal Year (($)/Share) Date 5% ($) 10% ($)
- ---- --------------- --------------- -------------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Daniels, III... -- -- $ -- -- $ -- $ --
George Schlukbier....... 1,641 2.9% .75 1/1/08 774 1,961
John Thorn.............. 1,513 2.7% .75 1/1/08 714 1,808
Ezra Kucharz............ 1,513 2.7% .75 1/1/08 714 1,808
Eric Harris............. 1,513 2.7% .75 1/1/08 714 1,808
</TABLE>

- ---------------
(1)Assumes increases in the fair market value of the common stock of 5% and 10%
per year from the date of the grant over the terms of the options in compliance
with the rules and regulations of the SEC, and does not represent our estimate
or projection of the future value of the common stock. The actual value real-
ized may be greater or less than the potential realizable values presented in
the table.

51
<PAGE>

The following table presents information concerning stock option holdings held
by the named officers at December 31, 1998.

Fiscal Year-End Option Values

<TABLE>
<CAPTION>
---------------------------------------------------
Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
FY-End (#) FY-End($)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Frank A. Daniels, III...... 4,498 8,897 $2,698 $5,398
George Schlukbier.......... 369 2,750 185 1,375
John Thorn................. 106 1,833 53 917
Ezra Kucharz............... 188 2,077 94 1,039
Eric Harris................ 666 3,511 333 1,756
</TABLE>

There were no option exercises by the named officers in the fiscal year ended
December 31, 1998.

Employment Agreements

Mr. Daniels and Mr. Schlukbier are each party to noncompetition, nondisclosure
and inventions agreements, dated June 1997, that survive the termination of
employment for the shorter of the period of time that we continue paying such
employee's base salary or a period of two years after the termination or ces-
sation of such employee's employment with us for any reason.

John Thorn is party to a three-year employment and noncompetition agreement
that terminates on March 31, 2000. He is to be paid an annual salary of
$100,000 and is provided employment benefits similar to executive employees of
comparable status. Mr. Thorn's agreement also contains noncompetition and non-
solicitation provisions that are intended to survive the termination of his
employment for one year. If Mr. Thorn is terminated without cause, we will
provide him salary, bonus and benefits for the greater of the remainder of his
term of employment or one month for every full year of service, all of which
are subject to reduction if he secures employment with another employer.

1997 Stock Plan

Our 1997 stock plan was adopted by the board of directors in November 1997. A
total of 1,195,000 shares of common stock has been reserved for issuance under
the plan. Through November 12, 1999, outstanding options to purchase 395,027
shares of common stock at a weighted average exercise price of $8.25 per share
were outstanding granted under the plan, and 13,829 shares had been issued un-
der the plan at an average exercise price of $1.08 per share. The plan will
terminate in November 2007, unless sooner terminated by the board of direc-
tors.

Our plan provides for grants of "incentive stock options," within the meaning
of Section 422 of the Internal Revenue Code, to employees (including officers
and employee directors) and grants of nonstatutory options to employees and
consultants. It also allows for the grant of stock purchase rights. The plan
is administered by the board of directors. The exercise price of incentive
stock options granted under the plan must not be less than the fair market
value of the common stock on the date of grant. With respect to any optionee
who owns stock representing more than 10% of the voting power of all classes
of our outstanding capital stock, the exercise price of any incentive stock
option must be equal to at least 110% of the fair market value of the common
stock on the date of grant, and the term of the option must not exceed 5
years. The terms of all other options may not exceed 10 years. The aggregate
fair market value of common stock (determined as of the date of the option
grant) for which incentive stock options may for the first time become exer-
cisable by any individual in any calendar year may not exceed $100,000.

52
<PAGE>

The board of directors may amend or terminate the plan at any time, except that
stockholder approval is required for some amendments. No amendment or termina-
tion may adversely affect the rights, with respect to previous grants, of any
optionee without his or her consent. The board of directors may also select the
consultants and employees to whom options or stock purchase rights may be
granted as well as the number of shares of common stock covered by each award
and the terms and conditions, including any vesting schedule, for each award.
The board of directors may accelerate the vesting or exercisability of any op-
tion or stock purchase rights issued under the plan.

The plan also provides for the award of stock purchase rights, subject to a re-
stricted stock purchase agreement which, unless the board of directors or a
committee of board members determines otherwise, grants us an option to repur-
chase the restricted stock upon termination of its recipient and at the pur-
chase price paid by the recipient. The purchase price, specified in the agree-
ment, may not be less than 85% of the fair market value of the underlying
shares at the time of the award. A holder of stock purchase rights is entitled
to the same rights as a stockholder.

In the event of any change in our outstanding common stock by reason of stock
split, reverse stock split, stock dividend, combination, recapitalization or
reclassification of our common stock, or any other increase or decrease in the
number of issued shares effected without receipt of consideration, the plan
provides, subject to any required stockholder action, for the proportionate in-
crease or decrease in the number of shares of our common stock authorized for
issuance under the plan and covered by each outstanding option or stock pur-
chase right.

401(k) Plan

We maintain a tax-qualified employee savings and retirement plan for employees
who elect to participate. Subject to certain limitations, participants may con-
tribute up to 15% of their compensation on a pre-tax basis to the 401(k) plan.
We contribute matching funds in amounts equal to 50% of each dollar of an em-
ployee's contributions, up to 6% of the employee's salary. Amounts attributable
to participant contributions under the 401(k) plan are fully vested at all
times (with our contributions vesting beginning after 2 years and becoming
fully vested after 4 years). Participants are entitled to receive their vested
401(k) plan accounts, including investment earnings, upon death, retirement or
other termination of employment.

53
<PAGE>

Certain Transactions

In March 1997, Total Ltd., a North Carolina corporation and predecessor in in-
terest to Total Sports, issued shares of its common stock to Frank A. Daniels,
III, its Chairman and Chief Executive Officer, George Schlukbier, its Presi-
dent, and Colin Boatwright, Eric Harris and Ezra Kucharz, each a Vice President
of Total Ltd.

In March 1997, Total Ltd. purchased all the sports content business assets, in-
cluding related liabilities and accounts payable, of KOZ inc., a North Carolina
corporation, for a principal purchase price of approximately $1,414,000. At the
time of this transaction, Mr. Daniels, III was the Chairman and Chief Executive
Officer of Total Ltd. and was also a director and principal shareholder of KOZ.

In May 1997, Total Ltd. issued a warrant to Mr. Daniels, Jr. to purchase 10,800
shares of its common stock and a warrant to Mr. Daniels, III to purchase 5,400
shares of its common stock, each at an exercise price of $3.42 per share, in
consideration for certain cash contributions previously made to Total Ltd. At
the time of this transaction, Mr. Daniels, Jr. and Mr. Daniels, III were direc-
tors of Total Ltd.

In June 1997, Total Ltd. issued an aggregate of 125,000 shares of its Series A
preferred stock and warrants to purchase an aggregate 365,218 shares of its
common stock, at an exercise price of $0.01 per share, to Mr. Daniels, Jr. and
Piedmont Venture Partners Limited Partnership in a private placement for an ag-
gregate purchase price of approximately $1,250,000. At the time of this trans-
action, Stacy Anderson, a managing principal of Piedmont Venture Management,
Inc., general partner of Piedmont Venture Partners, was elected to the board of
directors of Total Ltd.

In November 1997, Total Ltd. issued an aggregate of 445,263 shares of its Se-
ries B preferred stock to a group of private investors in a private placement
for an aggregate purchase price of approximately $2,000,000. Purchasers of its
Series B preferred stock included the following related parties:

<TABLE>
<CAPTION>
------------------------
Number of Aggregate
Name Shares Purchase Price
- ---- --------- --------------
<S> <C> <C>
Piedmont Venture Partners Limited Partnership......... 111,316 $ 500,031
Nuray Telluride Properties Limited Partnership........ 222,632 $1,000,063
Frank A. Daniels, III................................. 44,526 $ 200,011
Frank A. Daniels, Jr.................................. 44,526 $ 200,011
Julie Nowell, sister of Frank A. Daniels, III......... 22,263 $ 100,000
</TABLE>

At the time of the transaction, William E. Ray, manager of Nuray Telluride
Properties Limited Partnership, was elected to the board of directors of Total
Ltd.

From January to April 1998, Total Ltd. issued 10% convertible promissory notes
in the aggregate principal amount of $2,500,000 and warrants exercisable for an
aggregate of 50,805 shares of its Series B preferred stock at an exercise price
of $4.492 per share to the following related parties:

<TABLE>
<CAPTION>
--------------------
Principal
Amount of Number of
Promissory Warrant
Name Note Shares
- ---- ---------- ---------
<S> <C> <C>
Piedmont Venture Partners Limited Partnership.............. $1,000,000 20,322
Nuray Telluride Properties Limited Partnership............. $1,000,000 20,322
Frank A. Daniels, III...................................... $ 500,000 10,161
</TABLE>

All these loans were converted into our Series C preferred stock in August
1998. William W. Neal, a managing principal of Piedmont Venture Management, re-
placed Ms. Anderson as a member of the board of directors of Total Ltd. on Jan-
uary 22, 1998.

54
<PAGE>

In January 1998, we issued a warrant to purchase 7,268 shares of the common
stock of Total Ltd., at an exercise price of $4.492 per share, to Mr. Daniels,
III in consideration for his $25,000 charitable contribution to the Hank Aaron
Fund in the name of Total Ltd., effective as of September 4, 1997. In April
1998, the board of directors of Total Ltd. approved the issuance of a total of
37,100 shares of its common stock to Mr. Daniels, III in consideration for
$2,000,000 of his $3,500,000 continuing guaranty of Total Ltd.'s line of
credit with First Union National Bank.

In June 1998, we acquired all the tangible and intangible property and assets
of Total College Communications Company, LLC, a Kentucky limited liability
company, in exchange for 837,942 shares of our common stock. Total College
Communications then distributed the shares of common stock to its members, To-
tal Ltd. and Host Communications, Inc. In connection with this acquisition, we
assumed all rights and obligations of Total College Communications to (1) a
services agreement with Host whereby we would serve as the exclusive on-line
publisher for intercollegiate sports publications authorized by Host, (2) a
marketing agreement with Host whereby we would engage Host as a nonexclusive
sales agent for marketing of the intercollegiate sports publication Web sites
published by us and (3) a Web site and cybercasting agreement with Host
whereby we would produce and broadcast certain NCAA championships on the
Internet. At the time of the transaction, Mr. Daniels, Jr. was a director of
Total Ltd. and Total Sports, Mr. Daniels, III was a director and Chief Execu-
tive Officer of Total Ltd. and Total Sports, Ezra Kucharz was an Executive
Vice President of Total Sports and a manager and Chief Executive Officer of
Total College Communications, and Charles L. Jarvie, president of Host and a
manager of Total College Communications, was elected as director.

In June 1998, we acquired all the assets and liabilities of Total Ltd. in a
merger in which we were the surviving corporation. At the time of the transac-
tion, the board of directors of Total Ltd. was identical to our board of di-
rectors.

In June 1998, we issued a 10% convertible promissory note in the principal
amount of $1,000,000 and a warrant exercisable for 20,703 shares of our Series
B preferred stock at an exercise price of $4.492 per share to Piedmont Venture
Partners. This loan was converted into our Series C preferred stock in August
1998.

In August 1998, we issued an aggregate 1,418,200 shares of our Series C pre-
ferred stock to a group of private investors for an aggregate consideration of
approximately $10,078,000. Purchasers of our Series C preferred stock included
the following related parties:

<TABLE>
<CAPTION>
------------------------
Number of Aggregate
Name Shares Purchase Price
- ---- --------- --------------
<S> <C> <C>
Winstar Interactive Ventures I, Inc................... 351,815 $2,499,997
Bull Run Corporation.................................. 351,815 $2,499,997
Piedmont Venture Partners Limited Partnership......... 290,794 $2,066,382
Nuray Telluride Properties Limited Partnership........ 201,132 $1,429,244
Frank A. Daniels, III................................. 72,571 $ 515,690
</TABLE>

Winstar Interactive Ventures I, Inc., Piedmont Venture Partners Limited Part-
nership, Nuray Telluride Properties Limited Partnership and Mr. Daniels, III
also received warrants to purchase an aggregate of up to 632,244 shares of Se-
ries C1 preferred stock, for an aggregate purchase price of up to $5,549,996.

At the time of the transaction, Stuart B. Rekant, President of Winstar New Me-
dia Company, Inc. and its subsidiary, Winstar Interactive Ventures, and Robert
S. Prather, Jr., the president of Bull Run, were elected to our board of di-
rectors.

In connection with our sale of Series C preferred stock, we entered into a
programming and inventory agreement with The Winning Line, Inc. d/b/a
SportsFan Enterprises, a subsidiary of Winstar New Media Company, to purchase
advertising inventory on the SportsFan Radio Network for a 6-month period of
time for an aggregate purchase price of $500,000. Additionally, we entered
into a Web site agreement with SportsFan and Winstar Interactive Media Sales,
Inc., also a subsidiary of Winstar New Media Company, to develop and establish
a co-branded Web site with content provided by us.

55
<PAGE>

In September 1998, our board of directors approved the issuance of 14,073
shares of our common stock to Gary Stevenson pursuant to the terms of a con-
sulting agreement and in consideration for consulting and advisory services
previously provided and to be provided by him. At the time of the transaction,
Mr. Stevenson served as a member of our board of directors.

Pursuant to a subscription agreement dated September 15, 1998, we issued 37,100
shares of our common stock to Mr. Daniels, III in exchange for his personal
guaranty of our line of credit with First Union National Bank.

From January to April 1999, we issued an aggregate 630,756 shares of our Series
C1 preferred stock to a group of private investors for an aggregate considera-
tion price of $5,985,874.44. Purchasers of our Series C1 preferred stock in-
cluded the following related parties:

<TABLE>
<CAPTION>
------------------------
Number of Aggregate
Name Shares Purchase Price
- ---- --------- --------------
<S> <C> <C>
Piedmont Venture Partners II, L.P. ................... 105,374 $1,000,000
Nuray Telluride Properties Limited Partnership........ 105,374 $1,000,000
Bull Run Corporation.................................. 105,374 $1,000,000
Frank A. Daniels, III................................. 52,687 $ 500,000
Frank A. Daniels, Jr. ................................ 31,612 $ 299,998
Gary R. Stevenson..................................... 7,903 $ 75,000
</TABLE>

In February 1999, we entered into a loan and security agreement with First Ra-
leigh Telex pursuant to which we issued a promissory note to First Raleigh
Telex for the principal amount of $114,921 due and payable in 36 monthly in-
stallments of principal and interest calculated at a rate of 9% per annum for
the purchase of certain office equipment. First Raleigh Telex maintains a secu-
rity interest in all equipment purchased with the proceeds of the loan.

In March 1999, our board of directors approved the issuance of 18,550 shares of
our common stock to Mr. Daniels, III in consideration for his guaranty of our
entire $3,500,000 line of credit with First Union National Bank from January
15, 1999 to July 15, 1999.

In June 1999, we acquired Long Distance Technologies, Inc. d/b/a Motortrax pur-
suant to the terms of an agreement and plan of merger. Stockholders of
Motortrax received 284,401 shares of our common stock in exchange for all of
the outstanding shares of capital stock of Motortrax. At the time of the trans-
action, Piedmont Venture Partners and White Oak Properties Limited Partnership
owned a majority of the outstanding capital stock of Motortrax. Our director
William E. Ray is a principal of White Oak Properties.

In June 1999, we issued a 10% convertible promissory note in the principal
amount of $4,000,000 and a warrant exercisable for 60,277 shares of our common
stock at an exercise price of $16.59 to Labatt Brewing Company Limited.

Effective as of August 1999, we entered into a lease agreement and first amend-
ment thereto with First Raleigh Telex, LLC pursuant to which we leased an ag-
gregate of 27,010 square feet of space at 234 Fayetteville Street Mall, Ra-
leigh, North Carolina, for an aggregate rental amount of $57,722 per year. The
lease expires on June 30, 2009. Mr. Daniels, Jr. is a principal of First Ra-
leigh Telex.

56
<PAGE>

In September and November 1999, we issued 10% convertible promissory notes in
the aggregate principal amount of $2,500,000 and warrants exercisable for an
aggregate of 15,067 shares of our common stock, at an exercise price of $16.59
per share, to a group of private investors, including the following related
parties:

<TABLE>
<CAPTION>
------------------
Principal Number
Amount of of
Promissory Warrant
Name Note Shares
- ---- ---------- -------
<S> <C> <C>
Winstar Interactive Ventures I, Inc. ........................ $ 500,000 3,013
Piedmont Venture Partners II, L.P. .......................... $ 500,000 3,013
Nuray Telluride Properties Limited Partnership............... $1,000,000 6,027
</TABLE>

In November 1999, we issued an aggregate 2,140,955 shares of our Series D pre-
ferred stock and warrants exercisable for an aggregate 963,407 shares of our
Series D1 preferred stock, at an exercise price of $16.59 per share, to a group
of private investors for an aggregate consideration of approximately
$35,500,000. If the per share price of the shares of common stock sold in this
offering is less than $33.18, the conversion ratio of the Series D preferred
stock shall be adjusted so that holders of Series D preferred stock shall be
entitled to receive, for each share of Series D preferred stock converted, a
number of shares of common stock worth $33.18 at the per share initial public
offering price. Based upon a per share offering price of $ (the midpoint of
the range shown on the cover of this prospectus), the holders of Series D pre-
ferred stock would be entitled to receive shares of common stock. Purchasers
of our Series D preferred stock and warrants included the following related
parties:

<TABLE>
<CAPTION>
---------------------------------------
Number of Number of Aggregate
Name Shares Warrant Shares Purchase Price
- ---- --------- -------------- --------------
<S> <C> <C> <C>
TCV III and affiliated entities....... 602,608 271,171 $9,999,978
Winstar Interactive Ventures I,
Inc. ................................ 150,652 67,793 $2,499,995
Piedmont Venture Partners II, L.P. ... 30,130 13,558 $ 499,992
Zilkha Capital Partners and affiliated
entities............................. 301,304 135,586 $4,999,989
</TABLE>

In November 1999, we entered into a strategic partnership agreement with NBC
Sports, Inc., whereby NBC Sports will provide $17.4 million of certain on-air
promotion and marketing of our real-time live sporting event coverage in ex-
change for the issuance of 811,423 shares of our common stock and 811,423
shares of our Series E preferred stock (which will convert into eight shares of
common stock on the closing of this offering) to NBC Sports. If the per share
offering price of the common stock sold in this offering is less than $32.11,
NBC Sports will receive additional shares of common stock in amount such that
the total value of their shares of common stock valued at the per share offer-
ing price shall equal $26.875 million. Based upon a per share offering price of
$ (the midpoint of the range set forth on the cover of this prospectus), we
would issue an additional shares of common stock to NBC Sports.

Mr. Daniels, III currently personally guarantees our line of credit with First
Union National Bank, up to a maximum of $4,000,000.

For information regarding the grant of stock options to our executive officers,
please see "Management--Director Compensation" and "Management--Executive Com-
pensation."

For information regarding noncompetition and employment agreements to our exec-
utive officers, please see "Management--Employment Agreements."

57
<PAGE>

Principal Stockholders

The following table presents as of November 12, 1999 the number of shares of
common stock and the percentage of outstanding shares of common stock that are
beneficially owned by:

. each person that is the beneficial owner of more than 5% of our capital
stock;

. each of our directors;

. each named officer; and

. all of our current directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the Commis-
sion and generally includes voting or investment power with respect to securi-
ties, subject to community property laws, where applicable. Shares of common
stock subject to options and warrants that are presently exercisable or exer-
cisable within 60 days of November 12, 1999 are deemed to be outstanding and
beneficially owned by the person holding such option or warrant for the purpose
of computing the percentage of ownership of that person, but they are not
deemed outstanding for the purpose of computing the percentage of any other
person. The number of shares beneficially owned and the applicable percent own-
ership for each stockholder after this offering is based on shares of
common stock outstanding as of November 12, 1999 which includes shares
issued upon conversion of all of our outstanding shares of preferred stock
(with the exception of Series A preferred stock which shall be redeemed in con-
nection with this offering), the exercise of warrants to purchase 117,783
shares of common stock that will expire if not exercised prior to the consumma-
tion of this offering, together with applicable exercisable warrants and op-
tions for that stockholder. The numbers of shares do not include the additional
shares issuable to the holders of Series D preferred stock and NBC if the price
per share in this offering is less than $33.18 and $32.11, respectively. Unless
otherwise noted, each of the persons listed below has sole voting and invest-
ment power with respect to his or her shares and the address for each of the
persons listed below as beneficially owning more than five percent of our out-
standing capital stock is 234 Fayetteville Street, Raleigh, North Carolina
27601.

<TABLE>
<CAPTION>
--------------------------------------------------
Percent Beneficially Owned
-------------------------------
Name and Address of Number of Shares
Principal Stockholders Beneficially Owned Before Offering After Offering
- ---------------------- ------------------ --------------- --------------
<S> <C> <C> <C>
Frank A. Daniels, III(1)... 897,195 11.73% %
Frank A. Daniels, Jr.(2)... 161,003 2.09
Charles L. Jarvie(3)....... 419,352 5.49
William W. Neal(4)......... 1,027,717 12.88
Robert S. Prather, Jr.(5).. 457,570 *
William E. Ray(6).......... 802,280 10.41
Stuart B. Rekant(7)........ 573,673 7.45
Gary R. Stevenson(8)....... 27,363 *
Bull Run Corporation...... 457,189 5.99
4370 Peachtree Rd., NE
Atlanta, GA 30319-3099
Host Communications, 419,352 5.45
Inc.(9)...................
546 E. Main Street
Lexington, KY 40508
Labatts Brewing Company 409,789 5.25
Limited(10)...............
Labatt House
181 Bay Street, Suite 200
Toronto, Ontario M5J 2J3
NBC Sports, Inc. .......... 811,423 10.55
30 Rockefeller Plaza
New York, NY 10112
Nuray Telluride Properties 730,798 9.48
Limited Partnership(11)...
801 East Trade St.
Charlotte, NC 28202
Piedmont Venture Partners 1,027,717 12.88
Limited Partnership(12)...
6805 Morrison Blvd.,
Ste. 380
Charlotte, NC 28210
TCV III, L.P.(13).......... 873,779 11.05
575 High Street, Suite 400
Palo Alto, CA 94301
</TABLE>

58
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------
Percent Beneficially Owned
------------------------------
Name and Address of Number of Shares
Principal Stockholders Beneficially Owned Before Offering After Offering
- ---------------------- ------------------ --------------- --------------
<S> <C> <C> <C>
Winstar Interactive Ventures
I, Inc.(14)................ 573,673 7.45
230 Park Avenue, 31st Floor
New York, NY 10169
Zilkha Capital
Ventures(15)............... 436,890 5.62
767 Fifth Avenue
New York, NY 10169
George Schlukbier(16)....... 153,403 2.01
John Thorn(17).............. 139,121 1.82
Eric Harris(18)............. 24,999 *
Ezra Kucharz(19)............ 40,566 *
All directors and executive
officers as a group(20).... 4,724,427 57.37
</TABLE>

*Indicates less than one percent.
(1)Includes (a) 22,829 shares issuable upon the exercise of currently exercis-
able warrants and (b) 6,945 shares issuable upon the exercise of stock options.
(2)Includes (a) 83,840 shares issuable upon the exercise of currently exercis-
able warrants and (b) 1,025 shares issuable upon he exercise of stock options.
(3)All are shares and shares issuable upon the exercise of stock options held
by Host Communications, Inc., of which Mr. Jarvie is President. Mr. Jarvie dis-
claims beneficial ownership of such shares.
(4)Includes (a) 876,864 shares owned by Piedmont Venture Partners Limited Part-
nership and (b) 150,580 shares owned by Piedmont Venture Partners II, L.P., of
which Piedmont Venture Management, Inc. is general partner. Mr. Neal is manag-
ing principal of Piedmont Venture Management, Inc. and disclaims beneficial
ownership of such shares except to the extent of his pecuniary interest there-
in.
(5)Includes 381 shares issuable upon the exercise of stock options and 457,189
shares held by Bull Run Corporation, of which Mr. Prather is President. Mr.
Prather disclaims beneficial ownership except to the extent of his pecuniary
interest therein.
(6)Includes (a) 381 shares issuable upon the exercise of stock options, (b)
730,798 shares owned by Nuray Telluride Limited Partnership, the general part-
ner of which is Nuray Holdings LLC, of which Mr. Ray is the sole owner, and (c)
71,100 shares owned by White Oak Partners Limited Partnership, the general
partner of which is Nuray Holdings LLC, of which Mr. Ray is the sole owner. Mr.
Ray disclaims beneficial ownership of such shares held by Nuray Telluride Prop-
erties and White Oak Partners except to the extent of his pecuniary interest
therein. Mary Ann Kent is the manager of Nuray Holdings LLC, and has voting and
dispositive power over the shares owned by Nuray Telluride Limited Partnership
and White Oak Partners but disclaims beneficial ownership of such shares except
to the extent of her pecuniary interest therein.
(7)Includes 505,480 shares, 67,793 shares issuable upon the exercise of cur-
rently exercisable warrants and 400 shares issuable upon the exercise of stock
options. These shares are held by Winstar Interactive Ventures I, Inc., of
which Mr. Rekant is President. Mr. Rekant disclaims beneficial ownership of
such shares except to the extent of his pecuniary interest therein.
(8)Includes 1,019 shares issuable upon the exercise of stock options.
(9)Includes 381 shares issuable upon the exercise of stock options.
(10)Includes 168,746 shares issuable upon the exercise of currently exercisable
warrants.
(11)Includes (a) 20,322 shares issuable upon the currently exercisable warrants
and (b) 450 shares issuable upon the exercise of stock options.
(12)Includes (a) 345,258 shares issuable upon the exercise of currently exer-
cisable warrants and (b) 1,025 shares issuable upon the exercise of stock op-
tions.
(13)Includes 271,171 shares issuable upon the exercise of currently exercisable
warrants. Includes shares and currently exercisable warrants held by TCV III
(GP), TCV III Strategic Partners, L.P. and TCV III L.P., entities affiliated
with TCV III (Q), L.P.
(14)Includes (a) 400 shares issuable upon the exercise of stock options and (b)
67,793 shares issuable upon the exercise of currently exercisable warrants.
(15)Includes 135,586 shares issuable upon the exercise of currently exercisable
warrants. Includes 148,067 shares and 67,080 shares issuable upon the exercise
of currently exercisable warrants held by Zilkha Capital

59
<PAGE>

Partners, L.P. and 152,237 shares and 68,506 shares issuable upon exercise of
currently exercisable warrants held by Zilkha Guernsey Capital Partners, L.P.
(16)Includes 5,016 shares issuable upon the exercise of stock options.
(17)Includes 4,338 shares issuable upon the exercise of stock options.
(18)Includes 5,644 shares issuable upon the exercise of stock options.
(19)Includes 1,856 shares issuable upon the exercise of stock options.
(20)Includes the information in the notes above, as applicable.

60
<PAGE>

Description of Capital Stock

Our amended and restated certificate of incorporation, which will become effec-
tive upon completion of the offering, authorizes the issuance of 500,000,000
shares of common stock, no par value per share, and 50,000,000 shares of pre-
ferred stock, $.01 par value per share.

Common Stock

Holders of common stock are entitled to one vote per share on all matters to be
voted upon by the stockholders generally, including the election of directors.
Holders of common stock are entitled to receive dividends, if any, declared
from time to time by our board of directors out of funds legally available for
dividends. If Total Sports is liquidated, dissolved or wound-up, holders of
common stock will share proportionately in all assets available for distribu-
tion. However, dividend and distribution rights of holders of common stock will
be subject to the rights of any holders of any series of preferred stock as de-
scribed below. The holders of common stock have no preemptive or conversion
rights. The common stock does not have cumulative voting rights. As a result,
the holder or holders of more than half of the shares of common stock voting
for the election of directors can elect all directors being elected at that
time. All shares of common stock outstanding immediately following the offering
will be fully paid and will not be subject to further calls or assessments.
There are no redemption or sinking fund provisions applicable to the common
stock.

Preferred Stock

After this offering, no shares of preferred stock will be outstanding. Our
board of directors will be authorized, without further stockholder action, to
issue preferred stock in one or more series and to fix the voting rights, liq-
uidation preferences, dividend rights, repurchase rights, conversion rights,
redemption rights and terms, including sinking fund provisions, and certain
other rights and preferences, of the preferred stock. Although there is no cur-
rent intention to do so, our board of directors may, without stockholder ap-
proval, issue shares of a class or series of preferred stock with voting and
conversion rights, which could adversely affect the voting power or divided
rights of the holders of common stock and might have the effect of delaying,
deferring or preventing a change in control.

Warrants

From time to time, we have issued warrants exercisable for our capital stock.
As of November 12, 1999 the following outstanding warrants had been issued:

<TABLE>
<CAPTION>
----------------------------------------
Number of
Issued Exercise Outside
Underlying Security Warrants Price Expiration Date
- ------------------- --------- -------- ------------------
<S> <C> <C> <C>
Common stock........................ 365,218 $ 0.01 June 2, 2007(1)
Common stock........................ 16,200 $ 3.42 May 15, 2007(2)
Common stock........................ 6,598 $ 3.44 June 2, 2002(2)
Common stock........................ 7,268 $4.492 September 4, 2002(2)
Series B preferred stock............ 50,805(3) $4.492 January 31, 2008
Series B preferred stock............ 22,773(3) $4.492 June 30, 2008
Common stock........................ 8,285 $ 4.94 November 4, 2002(2)
Common stock........................ 31,458 $ 7.82 August 6, 2003(2)
Common stock........................ 318,500 $7.106 June 30, 2005
Common stock........................ 20,000 $7.106 August 7, 2003(2)
Common stock........................ 7,940 $10.44 January 15, 2004(2)
Common stock........................ 4,967 $10.44 April 6, 2004(2)
Common stock........................ 60,277 $16.59 May 31, 2009
Common stock........................ 15,067 $16.59 September 30, 2009(2)
Series D1 preferred stock........... 963,407(4) $16.59 November 12, 2004
</TABLE>

(footnotes on next page)

61
<PAGE>

(1)These warrants become exercisable upon the initial public offering of our
common stock to the public.
(2)These warrants expire upon the earlier to occur of an acquisition of Total
Sports or the initial public offering of our common stock to the public.
(3)These warrants will become exercisable for common stock upon the closing of
this offering.
(4)The mandatory conversion into common stock of the Series D preferred stock
resulting from this offering will cause these warrants to become exercisable
for common stock upon the closing of this offering.

Registration Rights

We are party to an investor rights agreement, dated as of November 12, 1999,
with stockholders who will hold in the aggregate shares of common
stock upon the completion of this offering. In the investor rights agreement,
we have granted the following rights:

. The right to demand that shares of common stock be registered under the
Securities Act of 1933, as amended, in a manner similar to the registration
of the shares that are offered by this prospectus. Any combination of the
stockholders party to the investor rights agreement collectively holding at
least 35% of such common stock may initiate one registration. In addition,
no request can be made within the six months following the effectiveness of
a registered public offering of our capital stock. Only one request can be
made every 12 months and each registration must include common stock with a
fair market value in excess of $5,000,000.

. The right to demand that shares of common stock be registered under the
Securities Act on Form S-3, when we are eligible to use that form. Any
combination of the stockholders party to the investor rights agreement
collectively holding at least 35% of such common stock may initiate four
such registrations. Only one request can be made every 12 months and each
registration must include common stock with a fair market value in excess of
$2,500,000.

. The right to have shares of common stock included in any registration of
common stock by us under the Securities Act, other than those effected on
Forms S-4 or S-8, subject to underwriter cut-backs.

We are required to bear the expenses of any registration or qualification de-
scribed above except for the fees of the stockholders' legal counsel, or under-
writers' discounts or commissions relating to the securities being registered.
These registration rights are transferable in certain circumstances.

Delaware Anti-Takeover Law and Certain Charter and Bylaw Provisions; Anti-
Takeover Effects

Delaware Corporate Law

The State of Delaware has a statute designed to provide Delaware corporations
with additional protection against hostile takeovers. The takeover statute,
which is codified in Section 203 of the Delaware General Corporate Law, is in-
tended to discourage certain takeover practices by impeding the ability of a
hostile acquirer to engage in certain transactions with the target company.

In general, Section 203 provides that a person who owns 15% or more of the out-
standing voting stock of Delaware corporation, referred to as an "interested
stockholder," may not consummate a merger or other business combination trans-
action with such corporation at any time during the 3-year period following the
date such person became an interested stockholder. The term "business combina-
tion" is defined broadly to cover a wide range of corporate transactions in-
cluding mergers, sales of assets, issuances of stock, transactions with subsid-
iaries and the receipt of disproportionate financial benefits.

62
<PAGE>

The statute exempts the following transactions from the requirements of Section
203:

. any business combination if, prior to the date a person became an interested
stockholder, the board of directors approved either the business combination
or the transaction which resulted in the stockholder becoming an interested
stockholder;

. any business combination involving a person who acquired at least 85% of the
outstanding voting stock in the transaction in which he became an interested
stockholder, with the number of shares outstanding calculated without regard
to those shares owned by the corporation's directors who are also officers
and by certain employee stock plans;

. any business combination with an interested stockholder that is approved by
the board of directors and by a two-thirds vote of the outstanding voting
stock not owned by the interested stockholder; and

. certain business combinations that are proposed after the corporation had
received other acquisition proposals and which are approved or not opposed
by a majority of certain continuing members of the board of directors.

A corporation may exempt itself from the requirements of the statute by adopt-
ing an amendment to its certificate of incorporation or bylaws electing not to
be governed by Section 203. At the present time, our board of directors does
not intend to propose any such amendment.

Certificate of Incorporation and Bylaws

Our amended and restated certificate of incorporation, effective immediately
upon the consummation of this offering, will provide:

. for the authorization of the board of directors to issue, without further
action by the stockholders, up to 50,000,000 shares of preferred stock in
one or more series and to fix the rights, preferences, privileges and
restrictions thereof;

. that any action required or permitted to be taken by our stockholders must
be effected at a duly called annual or special meeting of the stockholders
and may not be effected by a consent in writing;

. that special meetings of our stockholders may be called only by the chairman
of the board, the chief executive officer or a majority of the members of
the board of directors;

. for a classified board of directors; and

. that vacancies on the board of directors, including newly created
directorships, can be filled only by a majority of the directors then in
office.

Our amended and restated bylaws, effective immediately upon the consummation of
this offering, will include provisions (1) imposing advance notice requirements
for stockholder proposals and director nomination and (2) providing that our
directors may be removed only for cause and only by the affirmative vote of
holders at least 66 2/3% of the outstanding shares of voting stock together as
a single class.

These provisions in our amended and restated certificate of incorporation and
amended and restated bylaws are intended to enhance the likelihood of continu-
ity and stability in the composition of the board of directors and in the poli-
cies formulated by the board of directors and to discourage certain types of
transactions that might involve an actual or threatened change of control of
Total Sports. These provisions are designed to reduce our vulnerability to an
unsolicited proposal for a takeover that does not contemplate the acquisition
of all of our outstanding shares, or an unsolicited proposal for the restruc-
turing or sale of all or part of Total Sports. These provisions, however, could
discourage potential acquisition proposals and could delay or prevent a change
in control of Total Sports. These provisions might also have the effect of pre-
venting changes in our management.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is Continental Stock
Transfer & Trust Company, 2 Broadway, New York, New York 10004.

63
<PAGE>

Shares Eligible For Future Sale

Prior to the offering, there has been no public market for our common stock,
and we cannot predict the effect, if any, that sales of shares of common stock
or the availability of shares of common stock for sale will have on the market
price of the common stock prevailing from time to time. Nevertheless, sales of
substantial amounts of common stock in the public market, or the perception
that these sales could occur, could adversely affect the market price of our
common stock and could impair our future ability to raise capital through the
sale of our equity securities.

Upon completion of the offering and assuming no exercise of stock options after
October 31, there will be an aggregate of shares of our common stock out-
standing. The shares offered by this prospectus, or shares if the
underwriters' option is exercised in full, will be freely transferable without
restriction or limitation under the Securities Act of 1933, as amended, unless
purchased by our "affiliates" as that term is defined in Rule 144 under the Se-
curities Act. The remaining shares outstanding upon completion of the
offering will be "restricted securities" within the meaning of Rule 144 under
the Securities Act, and are subject to restrictions under the Securities Act.

Our directors, officers and security holders holding in the aggregate
shares of our common stock will agree not to sell, offer for sale, or otherwise
dispose of any of our common stock for a period of 180 days from the date of
this prospectus without the prior written consent of J.P. Morgan Securities
Inc. In addition, during that 180-day period, we will agree not to file any
registration statement (except for the registration statement on Form S-8 de-
scribed below) with respect to our common stock or any securities convertible
into or exercisable or exchangeable for common stock without the prior written
consent of J.P. Morgan Securities Inc. Beginning 180 days after the date of
this prospectus, 322,215 shares would be available for immediate sale in the
public market without restriction pursuant to Rule 144(k) and of the
restricted shares will become available for sale in the public market, subject
to the volume and other limitations of Rule 144.

In general, under Rule 144, as currently in effect, a person, or persons whose
shares are required to be aggregated, who owns shares that were purchased from
us or any of our affiliates at least one year previously, is entitled to sell
in brokers transactions or to market makers, within any three-month period com-
mencing 90 days after the date of this prospectus, the number of shares of com-
mon stock that does not exceed the greater of (1) one percent of the number of
then outstanding shares, approximately shares immediately after the offer-
ing, or (2) the average weekly reported trading volume during the four calendar
weeks preceding the date on which the required notice of sale is filed with the
SEC. Sales under Rule 144 are generally subject to the availability of current
public information about Total Sports. Any person, or persons whose shares are
aggregated, who owns shares that were purchased from us or any of our affili-
ates at least two years previously and who has not been an affiliate of ours at
any time during the 90 days preceding the sale, would be entitled to sell those
shares under Rule 144(k) without regard to the volume limitations or manner of
sale, public information or notice requirements of Rule 144.

Any of our employees, officers, directors or consultants who have purchased or
were awarded shares or options to purchase shares pursuant to a written compen-
satory plan or contract are entitled to rely on the resale provisions of Rule
701 under the Securities Act, which permits affiliates and non-affiliates to
sell such shares without having to comply with the holding period restrictions
of Rule 144, in each case commencing 90 days after the date of this prospectus.
In addition, non-affiliates may sell such shares without complying with the
public information, volume and notice provisions of Rule 144. Rule 701 is
available for our option holders as to all 13,829 shares issued pursuant to the
exercise of options granted prior to this offering.

After the offering, Total Sports intends to file a registration statement on
Form S-8 to register all of the 1,195,000 shares of common stock reserved for
issuance under our stock incentive plans and not eligible for sale under Rule
701. Accordingly, shares issued upon exercise of such options will be freely
tradeable by holders who are not our affiliates and, subject to the volume and
other limitations of Rule 144, by holders who are our affiliates.

64
<PAGE>

Underwriting

We and the underwriters named below have entered into an underwriting agreement
covering the common stock to be offered in this offering. J.P. Morgan Securi-
ties Inc., Hambrecht & Quist LLC, Allen & Company Incorporated and U.S. Bancorp
Piper Jaffrey, Inc. are acting as representatives of the underwriters. Each un-
derwriter has agreed to purchase the number of shares of common stock opposite
its name below.

<TABLE>
<CAPTION>
---------
Number of
Shares
Underwriters ---------
<S> <C>
J.P. Morgan Securities Inc...........................................
Hambrecht & Quist LLC................................................
Allen & Company Incorporated.........................................
U.S. Bancorp Piper Jaffrey, Inc. ....................................
---------
Total..............................................................
=========
</TABLE>

The underwriting agreement provides that if the underwriters take any of the
shares set forth in the table above, then they must take all of these shares.
No underwriter is obligated to take any shares allocated to a defaulting under-
writer except under limited circumstances.

The underwriters are offering the shares of common stock, subject to the prior
sale of shares, and when, as and if such shares are delivered to and accepted
by them. The underwriters will initially offer to sell shares to the public at
the initial public offering price set forth on the cover page of this prospec-
tus. The underwriters may sell shares to securities dealers at a discount of up
to $ per share from the initial public offering price. Any such securities
dealers may resell shares to certain other brokers or dealers at a discount of
up to $ per share from the initial public offering price. After the initial
public offering, the underwriters may vary the public offering price and other
selling terms.

If the underwriters sell more shares than the total number set forth in the ta-
ble above, the underwriters have the option to buy up to an additional shares
of common stock from us to cover such sales. They may exercise this option dur-
ing the 30-day period from the date of this prospectus. If any shares are pur-
chased with this option, the underwriters will purchase shares in approximately
the same proportion as set forth in the table above.

The following table shows the per share and total underwriting discounts that
we will pay to the underwriters. These amounts are shown assuming both no exer-
cise and full exercise of the underwriters' option to purchase additional
shares.

<TABLE>
<CAPTION>
-------------------------
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per share............................................ $ $
---- ----
Total................................................ $ $
==== ====
</TABLE>

The representatives have informed us that they do not expect discretionary
sales by the underwriters to exceed 5% of the shares being offered.

The underwriters may purchase and sell shares of common stock in the open mar-
ket in connection with this offering. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater num-
ber of shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of pre-
venting or slowing a decline in the market price of the common stock while the
offering is in progress. The underwriters may also impose a penalty bid, which
means that an underwriter must repay to the other underwriters a portion of the
underwriting discount received by it. An underwriter might be subject to a

65
<PAGE>

penalty bid if the representatives of the underwriters, while engaging in sta-
bilizing or short covering transactions, repurchase shares sold by or for the
account of that underwriter. These activities might stabilize, maintain or oth-
erwise affect the market price of the common stock. As a result, the price of
the common stock might be higher than the price that otherwise would exist in
the open market. If the underwriters commence these activities, they may dis-
continue them at any time. The underwriters may carry out these transactions on
the Nasdaq National Market, in the over-the-counter market or otherwise.

We estimate that the total expenses of this offering, excluding underwriting
discounts, will be $ .

We have agreed to indemnify the underwriters against certain liabilities, in-
cluding liabilities under the Securities Act of 1933.

We and our directors, officers and securityholders holding in the aggregate
shares of our common stock have agreed with the underwriters not to transfer,
dispose of or hedge any of our or their common stock, or securities convertible
into or exchangeable for shares of common stock, for a period of 180 days after
the date of this prospectus, except with the prior written consent of J.P. Mor-
gan Securities Inc. and in other limited circumstances, including our granting
of options or our issuance of shares of common stock upon the exercise of op-
tions under our existing employee benefit plans.

In connection with our Series D preferred stock financing, we agreed to use our
best efforts to cause the managing underwriters of our initial public offering
to establish a program whereby the managing underwriters would offer the Series
D preferred stock investors the opportunity to purchase shares of our common
stock in our initial public offering. The number of shares of the common stock
to be offered to the Series D preferred stock investors pursuant to this pro-
gram will be equal to the greater of $5,000,000 or 10% of the aggregate gross
proceeds to the Company from this offering, and is subject to reduction under
some circumstances. The Series D preferred stock investors have no obligation
to purchase any of the shares offered to them. We intend that all offers to
purchase shares pursuant to this program will be made in compliance with all
federal and state securities laws and all applicable rules and regulations
promulgated by the National Association of Securities Dealers, Inc.

In addition, at our request, the underwriters have reserved shares of common
stock for sale to our directors, officers, employees, family and friends who
have expressed an interest in participating in the offering. We expect these
persons to purchase no more than % of the common stock offered in the offer-
ing. The number of shares available for sale to the general public will be re-
duced to the extent such persons purchase such reserved shares.

We intend to apply to have the common stock listed on the Nasdaq National Mar-
ket under the symbol "TSPT."

It is expected that delivery of the shares will be made to investors on or
about , 2000.

There has been no public market for the common stock prior to this offering. We
and the underwriters will negotiate the initial offering price. In determining
the price, we and the underwriters expect to consider a number of factors in
addition to prevailing market conditions, including:

. the history of and prospects for the industry and for Internet companies
generally;

. an assessment of our management;

. our present operations;

. our historical results of operations;

. the trend of our revenues and earnings; and

. our earnings prospects.

66
<PAGE>

We and the underwriters will consider these and other relevant factors in rela-
tion to the price of similar securities of generally comparable companies. Nei-
ther we nor the underwriters can assure investors that an active trading market
will develop for the common stock, or that the common stock will trade in the
public market at or above the initial offering price.

From time to time in the ordinary course of their respective businesses, cer-
tain of the underwriters and their affiliates have engaged in and may in the
future engage in commercial banking and/or investment banking transactions with
us and our affiliates. In September 1998, we issued warrants to purchase
318,500 shares of common stock to Allen & Company Incorporated in consideration
for placement agent services in connection with the offering of our Series C
preferred stock. In April 1999, employees of J.P. Morgan Securities Inc. pur-
chased 7,902 shares of our Series C1 preferred stock as part of our Series C1
preferred stock offering. In November 1999, persons and entities associated
with Hambrecht & Quist LLC purchased 24,104 shares of our Series D preferred
stock and warrants to purchase 10,848 shares of our Series D1 preferred stock
as part of our Series D preferred stock offering. In addition, Access Technolo-
gies Partners, L.P., a fund of outside investors that is managed by a subsidi-
ary of Hambrecht & Quist California, purchased 96,419 shares of our Series D
preferred stock and warrants to purchase 43,389 shares of our Series D1 pre-
ferred stock as part of our Series D preferred stock offering. Upon consumma-
tion of this offering, the warrants to purchase shares of Series D1 preferred
stock convert into warrants to purchase our common stock. The exercise price of
the warrants is $16.59 per share.

67
<PAGE>

Legal Matters

The validity of the common stock offered hereby will be passed on for us by Wy-
rick Robbins Yates & Ponton LLP, Raleigh, North Carolina. Attorneys of Wyrick
Robbins Yates & Ponton LLP beneficially own shares of our common stock and
warrants to purchase 1,355 shares of common stock. Certain legal matters in
connection with the offering will be passed on for the underwriters by Cahill
Gordon & Reindel, a partnership including a professional corporation, New York,
New York.

Experts

The consolidated financial statements of Total Sports as of December 31, 1997
and 1998 and for the period from February 20, 1997 (date of inception) through
December 31, 1997 and the year ended December 31, 1998, included in the pro-
spectus, and the related financial statement schedule included elsewhere in the
registration statement, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports appearing herein and elsewhere in the reg-
istration statement, and have been so included based upon the reports of such
firm given upon their authority as experts in accounting and auditing.

The statement of net assets acquired from KOZ inc. (predecessor entity of Total
Sports) as of March 31, 1997, and the statements of operations and cash flows
from the sports content business acquired from KOZ inc. for the eleven-month
period ended March 31, 1997, included in the prospectus, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appear-
ing herein and elsewhere in the registration statement, and have been so in-
cluded based upon the report of such firm given upon their authority as experts
in accounting and auditing.

The financial statements of Long Distance Technologies, Inc. as of December 31,
1997 and 1998 and for each of the two years ended December 31, 1998, included
in the prospectus, have been audited by Deloitte & Touche LLP, independent au-
ditors, as stated in their report appearing herein and elsewhere in the regis-
tration statement, and have been so included based upon the report of such firm
given upon their authority as experts in accounting and auditing.

Where You Can Find More Information

We have filed with the Commission a registration statement on Form S-1, includ-
ing exhibits, schedules and amendments, under the Securities Act with respect
to the shares of common stock to be sold in this offering. This prospectus does
not contain all the information included in the registration statement. For
further information about us and the shares of our common stock to be sold in
this offering, please refer to this registration statement. Complete exhibits
have been filed with our registration statement on Form S-1.

You may read and copy our registration statement and any contract, agreement or
other document filed as an exhibit to our registration statement or any other
information from our filings at the Commission's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the Commission.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for fur-
ther information about the public reference rooms. Our filings with the Commis-
sion, including our registration statement, are also available to you on the
Securities and Exchange Commission's Web site, http://www.sec.gov. As a result
of this offering, we will become subject to the information and reporting re-
quirements of the Securities Exchange Act of 1934, and will file periodic re-
ports, proxy statements and other information with the Commission. Upon ap-
proval of our common stock for quotation on the Nasdaq National Market, these
reports, proxy statements and other information may also be inspected at the
offices of Nasdaq Operations, 1735 K Street N.W., Washington, DC 20006.

We intend to furnish our stockholders with annual reports containing audited
financial statements, and make available to our stockholders quarterly reports
for the first three quarters of each year containing unaudited interim finan-
cial information.

68
<PAGE>

Index to Financial Statements

<TABLE>
<S> <C>
Consolidated Financial Statements of Total Sports Inc.:

Independent Auditors' Report............................................. F-2

Consolidated Balance Sheets as of December 31, 1997 and 1998, and June
30, 1999 (unaudited).................................................... F-3

Consolidated Statements of Operations for the period February 20, 1997
(date of inception) through December 31, 1997, the year ended December
31, 1998, and the six months ended June 30, 1998 and 1999 (unaudited)... F-5

Consolidated Statements of Stockholders' Deficiency for the period
February 20, 1997 (date of inception) through December 31, 1997, the
year ended December 31, 1998, and the six months ended June 30, 1999
(unaudited)............................................................. F-6

Consolidated Statements of Cash Flows for the period February 20, 1997
(date of inception) through December 31, 1997, the year ended December
31, 1998, and the six months ended June 30, 1998 and 1999 (unaudited)... F-8

Notes to Consolidated Financial Statements............................... F-10

Financial Statements of KOZ inc.:

Independent Auditors' Report............................................. F-30

Statement of Net Assets Acquired from KOZ inc. as of March 31, 1997...... F-31

Statement of Operations of the Sports Content Business Acquired from KOZ
inc. for the period May 1, 1996 through March 31, 1997.................. F-32

Statement of Cash Flows from Operations of the Sports Content Business
Acquired from KOZ inc. for the period May 1, 1996 through March 31,
1997.................................................................... F-33

Notes to Financial Statements............................................ F-34
Financial Statements of Long Distance Technologies, Inc.:

Independent Auditors' Report............................................. F-36

Balance Sheets as of December 31, 1997 and 1998, and May 31, 1999
(unaudited)............................................................. F-37

Statements of Operations for the years ended December 31, 1997 and 1998,
and the five-month periods ended May 31, 1998 and June 4, 1999
(unaudited)............................................................. F-38

Statements of Shareholders' Equity (Deficiency) for the years ended
December 31, 1997 and 1998, and the five months ended May 31, 1999
(unaudited)............................................................. F-39

Statements of Cash Flows for the years ended December 31, 1997 and 1998,
and the five-month periods ended May 31, 1998 and June 4, 1999
(unaudited)............................................................. F-40

Notes to Financial Statements............................................ F-41

Unaudited Pro Forma Financial Data

Unaudited Pro Forma Statement of Operations Data for the year ended
December 31, 1998....................................................... F-49

Unaudited Pro Forma Statement of Operations Data for the six months ended
June 30, 1999........................................................... F-50

Notes to Unaudited Pro Forma Statement of Operations Data................ F-51
</TABLE>

F-1
<PAGE>

Independent Auditors' Report

To the Board of Directors and Stockholders of
Total Sports Inc.
Raleigh, North Carolina

We have audited the accompanying consolidated balance sheets of Total Sports
Inc. and subsidiaries as of December 31, 1997 and 1998, and the related consol-
idated statements of operations, stockholders' deficiency and cash flows for
the period February 20, 1997 (date of inception) through December 31, 1997 and
the year ended December 31, 1998. These financial statements are the responsi-
bility of Total Sports' 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 stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting 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 pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Total Sports and subsidiaries as
of December 31, 1997 and 1998, and the results of their operations and their
cash flows for the period February 20, 1997 (date of inception) through Decem-
ber 31, 1997 and the year ended December 31, 1998, in conformity with generally
accepted accounting principles.

Deloitte & Touche LLP

Raleigh, North Carolina
August 1, 1999 (November 12, 1999 as to Note 16)

F-2
<PAGE>

Total Sports Inc.
Consolidated Balance Sheets

(Unaudited as to June 30, 1999 information)

<TABLE>
<CAPTION>
-------------------------------------
December 31, December 31, June 30,
1997 1998 1999
------------ ------------ -----------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 236,781 $ 684,777 $ 59,125
Accounts receivable (less allowance for
doubtful accounts
and sales returns; 1997--$34,820;
1998--$440,565;
1999--$819,679) 192,356 624,022 778,353
Accounts receivable from employees and
affiliates 27,190 13,800 135,759
Other receivables 46,818 52,210
Inventory (less allowance for
obsolescence; 1997--$37,138; 1998--
$143,983; 1999--$626,245) 163,419 168,396 351,998
Deferred publishing costs 40,409 97,049 274,514
Prepaid assets 45,613 184,465 382,199
Other current assets 16,965 16,965
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total current assets 752,586 1,789,474 2,051,123
Investment in Affiliate (Note 2) 7,295
Receivable From Joint Venture Partner
(Note 15) 138,341
Deferred Publishing Costs 84,501 392,688 312,027
Property and Equipment, Net (Notes 2, 3
and 5) 742,056 1,307,403 1,771,985
Goodwill (less accumulated amortization;
1997--$31,556;
1998--$217,041; 1999--$538,722) (Note 2) 638,207 1,184,106 4,282,965
Databases (less accumulated amortization;
1997--$31,340;
1998--$112,991; 1999--$159,731) (Note 2) 261,639 541,407 494,667
Other Assets 20,885 66,679 33,340
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total Assets $2,638,215 $5,281,757 $8,953,402
========== ========== ==========
</TABLE>

F-3
<PAGE>

Total Sports Inc.
Consolidated Balance Sheets (Concluded)

(Unaudited as to June 30, 1999 information)

<TABLE>
<CAPTION>
-----------------------------------------------------
Pro forma
December 31, December 31, June 30, June 30,
1997 1998 1999 1999
------------ ------------ ------------ -----------
(Unaudited) (Unaudited)
(Note 1)
<S> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS'
DEFICIENCY
Current Liabilities:
Accounts payable $ 272,284 $ 615,804 $ 509,830
Accrued expenses 821,122 1,355,440 2,269,194
Accrued expenses--
related parties (Note
15) 75,000 335,566 122,111
Excess of affiliate
losses over cost 9,077
Line of credit (Note 4) 2,330,000 3,083,483 732,590
Current maturities of
notes payable (Note 5) 16,992 42,392 3,844,073
Current maturities of
notes payable--related
parties (Note 5) 67,884
Current maturities of
capital lease
obligations (Note 6) 73,972 169,390
<CAPTION>
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Total current
liabilities 3,515,398 5,515,734 7,715,072
Notes Payable, net of
current maturities
(Note 5) 67,168 301,111 288,770
Notes Payable--Related
Parties, net of current
maturities (Note 5) 67,037
Capital Lease
Obligations, net of
current maturities
(Note 6) 121,658 161,285
Series A Redeemable
Preferred Stock (Notes
8 and 9) $10.00 par
value; 125,000 shares
authorized, issued and
outstanding at December
31, 1997 and 1998 and
June 30, 1999
($1,250,000 aggregate
liquidation value at
December 31, 1997 and
1998 and June 30,
1999); no shares issued
and outstanding, pro
forma 1,145,178 1,342,824 1,439,789
Commitments and
Contingencies (Notes 6
and 14)
Stockholders' Deficiency
(Notes 2, 8 and 9):
Preferred stock, $.001
par value; 1,925,000
shares authorized; no
shares issued and
outstanding at
December 31, 1997 and
1998 and June 30, 1999
Series B convertible
preferred stock, $4.49
par value; 650,000
shares authorized;
445,263 shares issued
and outstanding at
December 31, 1997 and
1998 and June 30, 1999
($2,000,000 aggregate
liquidation value at
December 31, 1997 and
1998 and June 30,
1999); no shares
issued and
outstanding, pro forma 1,936,935 1,936,935 1,936,935
Series C convertible
preferred stock, $.001
par value; 1,500,000
shares authorized;
1,418,200 shares
issued and outstanding
at December 31, 1998
and June 30, 1999
($10,077,729 aggregate
liquidation value at
December 31, 1998 and
June 30, 1999); no
shares issued and
outstanding, pro forma 1,418 1,418
Series C1 convertible
preferred stock, $.001
par value; 800,000
shares authorized;
630,756 shares issued
and outstanding at
June 30, 1999
($5,985,874 aggregate
liquidation value at
June 30, 1999); no
shares issued and
outstanding, pro forma 631
Common stock, $.001 par
value; 10,000,000
shares authorized at
December 31, 1997 and
1998 and June 30,
1999; 1,284,756 shares
and 1,755,180 shares
issued and outstanding
at December 31, 1997
and 1998,
respectively;
2,070,055 shares
issued and outstanding
at June 30, 1999;
shares issued and
outstanding, pro forma 1,284 1,755 2,070
Additional paid-in
capital (183,988) 11,067,755 19,263,190
Deficit (3,843,760) (15,007,433) (21,922,795)
<CAPTION>
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Total stockholders'
equity (deficiency) (2,089,529) (1,999,570) (718,551)
<CAPTION>
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Total Liabilities and
Stockholders'
Deficiency $ 2,638,215 $ 5,281,757 $ 8,953,402
<CAPTION>
============ ============ ============ ===========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>

Total Sports Inc.
Consolidated Statements of Operations

(Unaudited as to June 30, 1998 and 1999 information)

<TABLE>
<CAPTION>
---------------------------------------------------------
Period Six Months Ended
February 20, 1997 Year Ended ------------------------
Through December December 31, June 30, June 30,
31, 1997 1998 1998 1999
----------------- ------------ ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Digital publishing
(Note 15) $ 738,019 $ 2,082,979 $ 1,075,871 $ 2,935,480
Print publishing 257,344 1,314,692 492,717 1,040,563
E-Commerce 13,586 435,172 81,268 701,111
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Total revenues 1,008,949 3,832,843 1,649,856 4,677,154
Cost of Revenues:
Digital publishing
(Note 15) 1,395,009 3,566,676 1,681,570 3,786,200
Print publishing 410,286 2,375,249 685,142 1,468,002
E-Commerce 1,249 331,720 31,475 543,291
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Total cost of
revenues 1,806,544 6,273,645 2,398,187 5,797,493
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Gross Profit (Loss) (797,595) (2,440,802) (748,331) (1,120,339)
Operating Expenses
(Notes 12 and 13):
Product development
(Note 15) 1,467,167 2,671,969 1,100,595 1,999,317
Sales and marketing
(Note 15) 600,472 2,743,899 796,380 1,654,244
General and
administrative
(Note 15) 845,914 2,598,602 1,032,101 1,680,189
Amortization (Note
2) 31,556 185,485 38,689 321,682
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Total operating
expenses 2,945,109 8,199,955 2,967,765 5,655,432
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Operating Loss (3,742,704) (10,640,757) (3,716,096) (6,775,771)
Other Income
(Expense):
Minority interest in
joint venture
losses (earnings)
(Note 15) 138,341 (41,493) (41,493)
Equity in earnings
(loss) of affiliate
(Note 2) (24,076) 16,372
Interest income 5,119 18,332 4,075 5,279
Interest expense
(Note 9) (100,336) (507,348) (326,191) (161,242)
Other income 31,669
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Other income
(expense), net 43,124 (522,916) (363,609) (139,591)
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net loss (3,699,580) (11,163,673) (4,079,705) (6,915,362)
Dividends on preferred
stock (144,180) (197,645) (98,691) (96,965)
<CAPTION>
----------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net loss applicable to
common stockholders $(3,843,760) $(11,361,318) $(4,178,396) $7,012,327
<CAPTION>
================= ============ =========== ===========
<S> <C> <C> <C> <C>
Basic and diluted loss
per common share
(Note 10) $ (3.17) $ (7.28) $ (3.06) $ (3.96)
<CAPTION>
================= ============ =========== ===========
<S> <C> <C> <C> <C>
Pro forma basic loss
per common share
(unaudited) $ $
============ ===========
</TABLE>

See notes to consolidated financial statements

F-5
<PAGE>

Total Sports Inc.
Consolidated Statements of Stockholders' Deficiency

(Unaudited as to the six months ended June 30, 1999 information)

<TABLE>
<CAPTION>
Series B Series C Series C1
Convertible Convertible Convertible
Preferred Stock Preferred Stock Preferred Stock Common Stock
------------------ ---------------- ------------------ ----------------
Number Additional
of Number Number Number Paid-In Retained
Shares Amount of Shares Amount of Shares Amount of Shares Amount Capital Deficit
------- ---------- --------- ------ --------- -------- --------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, February
20, 1997 $ $ $ $ $ $
Issuance of
shares to
founders 961,291 961
Additional
equity
contributions
from shareholder 648,738
Issuance of
common stock for
Sports Extra
acquisition 290,323 290 133,258
Debit to paid-in
capital in
connection with
KOZ acquisition
(Note 2) (1,286,522)
Issuance of
warrants in
connection with
sale of Series A
redeemable
preferred stock 179,000
Advance from
stockholder
reclassified as
equity
contribution 125,000
Issuance of
Series B
convertible
preferred stock,
net of offering
costs of $63,065 445,263 1,936,935
Issuance of
common stock for
DesigNet
acquisition 33,142 33 16,538
Accrued
dividends on
Series A
redeemable
preferred stock (127,500)
Discount
accretion on
Series A
redeemable
preferred stock (16,680)
Net loss (3,699,580)
<CAPTION>
------- ---------- --------- ------ --------- -------- --------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January
1, 1998 445,263 1,936,935 1,284,756 1,284 (183,988) (3,843,760)
<CAPTION>
------- ---------- --------- ------ --------- -------- --------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of
common stock for
Total College
Communications
acquisition 418,971 419 462,278
Exercise of
common options 280 1 140
Issuance of
common stock 51,173 51 60,373
Issuance of
Series C
convertible
preferred stock,
net of offering
costs of
$301,758 1,418,200 1,418 9,774,553
Advance for
Series C1
convertible
preferred stock 1,000,000
Issuance of
Series B
cumulative
warrants 146,162
Issuance of
common stock
options 5,882
Accrued
dividends on
Series A
redeemable
preferred stock (150,000)
Discount
accretion on
Series A
redeemable
preferred stock (47,645)
Net loss (11,163,673)
<CAPTION>
------- ---------- --------- ------ --------- -------- --------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December
31, 1998 445,263 $1,936,935 1,418,200 $1,418 $ 1,755,180 $1,755 $11,067,755 $(15,007,433)
------- ---------- --------- ------ ------- -------- --------- ------ ----------- ------------
<CAPTION>
-------------
Total
Stockholders'
Equity
(Deficiency)
-------------
<S> <C>
Balance, February
20, 1997 $
Issuance of
shares to
founders 961
Additional
equity
contributions
from shareholder 648,738
Issuance of
common stock for
Sports Extra
acquisition 133,548
Debit to paid-in
capital in
connection with
KOZ acquisition
(Note 2) (1,286,522)
Issuance of
warrants in
connection with
sale of Series A
redeemable
preferred stock 179,000
Advance from
stockholder
reclassified as
equity
contribution 125,000
Issuance of
Series B
convertible
preferred stock,
net of offering
costs of $63,065 1,936,935
Issuance of
common stock for
DesigNet
acquisition 16,571
Accrued
dividends on
Series A
redeemable
preferred stock (127,500)
Discount
accretion on
Series A
redeemable
preferred stock (16,680)
Net loss (3,699,580)
<CAPTION>
-------------
<S> <C>
Balance, January
1, 1998 (2,089,529)
<CAPTION>
-------------
<S> <C>
Issuance of
common stock for
Total College
Communications
acquisition 462,697
Exercise of
common options 141
Issuance of
common stock 60,424
Issuance of
Series C
convertible
preferred stock,
net of offering
costs of
$301,758 9,775,971
Advance for
Series C1
convertible
preferred stock 1,000,000
Issuance of
Series B
cumulative
warrants 146,162
Issuance of
common stock
options 5,882
Accrued
dividends on
Series A
redeemable
preferred stock (150,000)
Discount
accretion on
Series A
redeemable
preferred stock (47,645)
Net loss (11,163,673)
<CAPTION>
-------------
<S> <C>
Balance, December
31, 1998 $(1,999,570)
-------------
</TABLE>

F-6
<PAGE>

Total Sports Inc.
Consolidated Statements of Stockholders' Deficiency--(Concluded)

(Unaudited as to six months ended June 30, 1999 information)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Series C1
Series B Series C Convertible
Convertible Convertible Preferred
Preferred Stock Preferred Stock Stock Common Stock
------------------ ---------------- -------------- ---------------- Total
Number Number Additional Stockholders'
of Number of of Number of Paid-In Retained Equity
Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit (Deficiency)
------- ---------- --------- ------ ------- ------ --------- ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January
1, 1999 445,263 $1,936,935 1,418,200 $1,418 -- $ 1,755,180 $1,755 $11,067,755 $(15,007,433) $(1,999,570)
Issuance of
common stock 18,550 19 33,371 33,390
Exercise of
common stock
options 11,924 12 7,305 7,317
Issuance of
Series C1
convertible
preferred stock 630,756 631 4,779,725 4,780,356
Issuance of
common stock for
Long Distance
Technologies
acquisition 284,401 284 3,227,667 3,227,951
Issuance of
common stock
options 27,332 27,332
Issuance of
warrants in
connection with
convertible
promissory note
payable 217,000 217,000
Accrued
dividends on
Series A
redeemable
preferred stock (75,000) (75,000)
Discount
accretion on
Series A
redeemable
preferred stock (21,965) (21,965)
Net loss (6,915,362) (6,915,362)
<CAPTION>
------- ---------- --------- ------ ------- ------ --------- ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance June 30,
1999 445,263 $1,936,935 1,418,200 $1,418 630,756 $631 2,070,055 $2,070 $19,263,190 $(21,922,795) $ (718,551)
<CAPTION>
======= ========== ========= ====== ======= ====== ========= ====== =========== ============ =============
</TABLE>

See notes to consolidated financial statements

F-7
<PAGE>

Total Sports Inc.
Consolidated Statements of Cash Flows

(Unaudited as to June 30, 1998 and 1999 information)

<TABLE>
<CAPTION>
Period Six Months Ended
February 20, 1998 ------------------------
Through Year Ended June 30, June 30,
December 31, December 31, 1998 1999
1997 1998 (Unaudited) (Unaudited)
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Operating Activities:
Net loss $(3,699,580) $(11,163,673) $(4,079,705) $(6,915,362)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Depreciation and
amortization 255,442 760,495 282,506 780,877
Loss on sale of
property and equipment 7,212 1,420
Compensation expense
for common stock and
option issuances 23,474 1,775 27,332
Interest expense on
line of credit
guarantee 42,665 42,665 33,390
Amortization of debt
discount 146,162 82,714 17,833
Interest expense on
notes payable
converted into equity 125,918 91,092
Provisions for doubtful
accounts and sales
returns 20,000 420,565 31,400 379,115
Provisions for
inventory obsolescence 37,138 106,845 166,019 297,162
Computer equipment
received as payment
for advertising sales (100,000) (100,000) (100,000)
Undistributed
(earnings) losses of
affiliates 24,077 (16,372)
Minority interest in
joint venture earnings
(losses) (138,341) 41,493 41,493
Changes in operating
assets and
liabilities:
Accounts receivable (266,448) (742,092) (457,903) (696,397)
Inventory (200,557) (111,822) (70,046) (461,781)
Deferred publishing
costs (124,910) (364,827) (305,808) (96,804)
Prepaid expenses and
other current assets (66,543) (201,611) (90,971) (30,984)
Accounts payable 337,097 125,269 (420,619)
Accrued expenses 358,406 787,657 (71,768) 579,509
<CAPTION>
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Net cash used in
operating activities (3,825,393) (9,860,365) (4,311,268) (6,621,681)
Investing Activities:
Purchases of property
and equipment (357,371) (740,824) (378,549) (395,664)
Equity investment in
Golf.com (250,000) (50,000)
Cash from acquired
companies 26,880 26,880 19,177
Acquisition of KOZ
sports content
business (1,414,240)
<CAPTION>
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Net cash used in
investing activities (1,771,611) (963,944) (401,669) (376,487)
Financing Activities:
Borrowings (repayments)
on line of credit, net 2,330,000 753,483 1,095,000 (2,350,893)
Proceeds from issuance
of notes payable 3,453,838 3,453,838 3,783,000
Principal repayments on
notes payable (12,847) (102,016) (60,000) (11,493)
Principal repayments on
capital leases (29,524) (1,765) (52,771)
Proceeds from issuance
of common stock and
cash contributions 649,699 308 20 7,317
Proceeds from issuance
of Series A redeemable
preferred stock, net 750,998
Proceeds from issuance
of warrants in
connection with Series
A redeemable offering
and convertible notes
payable 179,000 146,162 146,162 217,000
Proceeds from issuance
of Series B
Convertible Preferred
stock, net 1,936,935
Proceeds from issuance
of Series C
Convertible Preferred
stock, net 6,050,054
Proceeds from advance
for Series C1
Convertible Preferred
stock 1,000,000 4,780,356
<CAPTION>
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Net cash provided by
financing activities 5,833,785 11,272,305 4,633,255 6,372,516
Net Increase (Decrease)
in Cash and Cash
Equivalents 236,781 447,996 (79,682) (625,652)
Cash and Cash
Equivalents, Beginning
of Period 236,781 236,781 684,777
<CAPTION>
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Cash and Cash
Equivalents, End of
Period $ 236,781 $ 684,777 $ 157,099 $ 59,125
<CAPTION>
================= ============= =========== ===========
</TABLE>

See notes to consolidated financial statements

F-8
<PAGE>

Supplemental Disclosure of Cash Flow Information

<TABLE>
<CAPTION>
June 30, June 30,
1997 1998 1998 1999
------- -------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Cash paid for interest................ $37,287 $108,805 $77,298 $163,179
<CAPTION>
======= ======== =========== ===========
</TABLE>

Supplemental disclosures of non-cash investing and financing activities:

Period February 20, 1997 through December 31, 1997:
As discussed in Note 2, Total Sports issued 290,323 shares of common stock
valued at $133,548 as consideration for the purchase of the assets and liabil-
ities of Sports Extra, Inc. In connection with the Sports Extra acquisition,
Total Sports forgave a note receivable of $100,000 from Sports Extra. Also re-
lated to the Sports Extra acquisition, Total Sports assumed two notes payable,
totaling $93,046, including accrued interest, related to databases acquired
from Sports Extra.

As also discussed in Note 2, Total Sports issued 33,142 shares of common stock
valued at $16,571 as consideration for the purchase of the assets and liabili-
ties of DesigNet.

In connection with the Series A redeemable preferred stock offering, Total
Sports converted an advance from a stockholder of $250,000 into 25,000 shares
of Series A redeemable preferred stock.

Total Sports reclassified an advance from a founding stockholder of $125,000
as paid-in capital.

Total Sports accrued dividends of $127,500 and discount accretion of $16,680
relating to the Series A redeemable preferred stock.

Year Ended December 31, 1998:
As also discussed in Note 2, Total Sports issued 418,971 shares of common
stock valued at $481,817 as consideration for the remaining 50% ownership of
Total College Communications Company.

As discussed in Note 6, Total Sports acquired certain computer databases for
$361,359 by issuing a note payable.

Total Sports acquired certain computer hardware valued at $225,154 by entering
into noncancelable capital leases.

Total Sports accrued dividends of $150,000 and discount accretion of $47,645
relating to the Series A redeemable preferred stock.

Notes payable and accrued interest totaling $3,725,918 were converted into Se-
ries C convertible preferred stock.

See notes to consolidated financial statements

F-9
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements
(Unaudited as to June 30, 1998 and 1999 information)

1. Nature of Operations and Basis of Presentation

Total Sports is a leading online sports new media company with a focus on pro-
viding real-time, event-centered sports coverage. Total Sports' networks pres-
ent real-time, live event coverage through TotalCast programming that simulates
and enhances an actual spectators' experience by integrating interactive graph-
ical, textual and statistical analysis and information. Total Sports has five
networks: the Total College Sports Network; the Total Baseball Network; the To-
tal Golf Network; Total Racing; and Total Sportfishing Network. These networks
consist of over 100 Web sites that provide live event coverage, historical da-
tabases, expert analysis and breaking news of many collegiate and professional
sports. Total Sports uses proprietary technology infrastructure and business
processes to collect sports statistics and information once and disseminate
this content in customized formats to multiple distribution partners. This ar-
chitecture is utilized to deliver our content to over 250 other Web sites
through syndication partners. In addition to a unique and compelling user expe-
rience, Total Sports' networks provide online sponsorship and e-commerce oppor-
tunities for advertisers and merchants associated with specific sports,
leagues, teams and events. Total Sports also publishes encyclopedias, fan
guides and other sports-related titles which further establishes us as a sports
authority.

Total Sports Inc. was originally incorporated as Total Ltd., a North Carolina
corporation. On May 29, 1998, Total Sports Inc. was incorporated in the State
of Delaware. The capital structure of Total Sports Inc. was similar to Total
Ltd.'s in terms of the authorized number of shares, dividends, voting rights,
liquidation preference and redemption except the new capital structure autho-
rized Total Sports Inc. to issue up to 5,000,000 shares of preferred stock.

On June 2, 1998, Total Ltd. was merged with and into Total Sports Inc.. The
separate existence of Total Ltd. ceased, and Total Sports Inc. became the sur-
viving corporation. As part of the merger, each share of Total Ltd.'s issued
and outstanding Series A redeemable, Series B convertible, and common stock was
converted into and exchanged for one share of Total Sports Inc.'s Series A re-
deemable preferred stock, Series B convertible preferred stock, and common
stock, respectively.

Unaudited Financial Statements
The condensed consolidated financial statements as of and for the six months
ended June 30, 1998 and 1999 are unaudited. In addition, disclosure information
subsequent to August 1, 1999 (the date of our independent auditors' report) is
unaudited (except for Note 16, for which the auditors' report is dated November
12, 1999). In the opinion of management, the unaudited consolidated balance
sheet at June 30, 1999, and the unaudited consolidated statements of opera-
tions, stockholders' equity, and cash flows for the six months ended June 30,
1998 and June 30, 1999, include all adjustments, which include only normal re-
curring adjustments, necessary to present the financial position and results of
operations and cash flows for the periods then ended in accordance with gener-
ally accepted accounting principles.

The results of operations for the six months ended June 30, 1998 and June 30,
1999 are not necessarily indicative of results to be expected for the full fis-
cal year or any other period. The results of operations and comparisons with
prior and subsequent interim periods are materially impacted by the results of
operations of businesses acquired. Furthermore, Total Sports experiences higher
levels of revenues during the first quarter than during the second or third
quarters. Historically, Total Sports has achieved its highest revenues in its
first quarter.

Principles of Consolidation
The accompanying consolidated financial statements are prepared on the accrual
basis of accounting and include the accounts of Total Sports and its wholly-
owned subsidiary, Sports Extra Acquisition Corporation. During 1997, Total
Sports formed Total College Communications as a joint venture with Host Commu-
nications. As discussed in Note 2, Total Sports acquired the remaining 50% of
Total College Communications in June 1998. Total College Communications' re-
sults of operations have been consolidated with Total Sports operations since
Total College Communications' formation. All intercompany transactions have
been eliminated in consolidation.

The consolidated financial statements for the six months ended June 30, 1999
also include the accounts of Total Motorsports, Inc., a wholly-owned subsidiary
which was formed during 1999 and acquired Long Distance Technologies, Inc on
June 4, 1999 and Total Sports Publishing, Inc, a wholly-owned subsidiary which
was formed during 1999. All of the assets related to the print publishing seg-
ment were transferred to Total Sports Publishing, Inc, as of June 30, 1999. All
significant intercompany accounts and transactions have been eliminated in con-
solidation.

The investment in Golf.Com is accounted for by the equity method of accounting
as we exert significant influence over this entity.

F-10
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

Cash and Cash Equivalents
Total Sports considers all highly liquid temporary cash investments with an
original maturity of ninety days or less to be cash equivalents.

Concentration of Credit Risk
Total Sports relied on a single distributor for sales of all print titles dur-
ing 1997 and 1998. This distributor collected all sales proceeds and remitted
these monies, less the distribution fees, on a monthly basis. Effective Febru-
ary 1999, Total Sports entered into a termination agreement with the distribu-
tor that allows Total Sports to utilize another national distributor for all of
its titles except Total Hockey, with the original distributor receiving from 3%
to 5% percent of sales for all previously issued titles through June 2000. Dur-
ing the six months ended June 30, 1999, Total Sports paid approximately $2,000
to the original distributor under the terms of the termination agreement.

Inventory
Inventory consists primarily of the direct costs associated with the printing
of finished books (printing, graphics, etc.). Costs are recorded as titles are
developed and are expensed on a per unit basis when sold.

Deferred Publishing Costs
Total Sports' investment in publishing costs is capitalized and amortized over
the estimated selling period of one year using the sum-of-the-months digits
method beginning on the release date of the related book. Costs incurred for
titles that have not been released are classified as long-term deferred pub-
lishing costs. Amortization expense was approximately $29,000 in 1997, $574,000
in 1998, $38,000 for the six months ended June 30, 1998 and $359,000 for the
six months ended June 30, 1999.

Property and Equipment
Property and equipment is carried at historical cost and is being depreciated
using the straight-line method over the estimated useful lives of the related
assets over periods ranging from three to seven years.

Maintenance and repairs are charged to expense when incurred; improvements are
capitalized. Upon the sale or retirement of assets, the cost and accumulated
depreciation are removed from the account and any gain or loss is recognized.

Goodwill
Goodwill is amortized on a straight-line basis over the periods that expected
economic benefits will be provided, ranging from 19 months to 15 years. Manage-
ment estimates the period of economic benefit considering factors such as ex-
isting contracts and estimated lives of other operating assets acquired. The
realizability of goodwill is evaluated periodically when events or circum-
stances indicate a possible inability to recover the carrying amount. Such
evaluation is based on cash flow and profitability projections of existing
businesses. The analyses necessarily involve significant management judgment to
evaluate the capacity of an acquired business to perform within projections.

Databases
Databases represent the cost of acquiring historical statistical information
from outside parties in electronic formats. Databases are amortized on a
straight-line basis over a period of 7 years. Internal costs incurred to accu-
mulate statistical information are expensed as incurred.

Income Taxes
The tax effect of losses for all periods presented are recorded under the pro-
visions of Statement of Financial Accounting Standards ("SFAS") No. 109, Ac-
counting for Income Taxes. Under SFAS No. 109, deferred income taxes are recog-
nized for the tax consequences of "temporary" differences by applying enacted
statutory tax rates applicable to future years to differences between the fi-
nancial statement carrying amounts and the tax bases of existing assets and li-
abilities. Valuation allowances are established when necessary to reduce de-
ferred tax assets to the amount that is more likely than not expected to be re-
alized. As of December 31, 1997 and 1998 and June 30, 1999, the net deferred
tax assets have been fully reserved.

F-11
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

Revenue Recognition
Total Sports derives revenues from three primary sources: digital publishing,
print publishing and e-commerce. Digital publishing revenues result from the
sale of sponsorships and of banner advertisements, licensing of statistical
data and content, and providing web site development services for third parties
Sponsorship and advertising revenue is recognized in the period the advertising
is displayed, provided that no significant obligations remain. Licensing reve-
nue for statistical data is recognized when the statistical data has been de-
livered. Content licensing revenue is recognized over the period of the license
agreement as Total Sports delivers the content. Web site development revenue is
recognized as the services are performed, provided that no significant obliga-
tions remain. Amounts received for which services have not yet been provided
are recorded as deferred revenue on the balance sheets.

Print publishing revenues are derived from the sale of encyclopedias and other
hard cover and soft cover books. For titles Total Sports publishes, print pub-
lishing revenue is recognized upon the sale of books by a third-party distribu-
tor. For books that Total Sports co-published, revenue is recognized as Total
Sports earns fixed advances that are paid by the co-publisher. Upon the sale of
books where Total Sports is the publisher, a reserve for right of returns,
based on historical and industry averages, of approximately 37.0% is estab-
lished.

E-commerce revenues represent sales of sports equipment, apparel and memora-
bilia through online stores and event-driven merchandising. E-commerce revenue
is recognized once the merchandise has been shipped.

Total Sports recognizes advertising revenue as a result of barter transactions
for advertising and direct links to Total Sports' TotalCast(TM) for baseball
and other sports. Such revenue is recognized based on the fair value of the
consideration received, which generally consists of advertising. Barter revenue
and the corresponding expense are recognized in the period the advertising is
displayed. Total Sports had no barter transactions during 1997, recognized ap-
proximately $669,000 in barter revenue and expenses related to barter transac-
tions in 1998, approximately $224,000 for the six months ended June 30, 1998
and approximately $554,000 for the six months ended June 30, 1999.

Cost of Revenues
Digital publishing cost of revenues consists primarily of compensation and ben-
efits for the editorial and operations staff (including contract labor), roy-
alty and license payments, content fees, and allocations of facilities and
other shared costs such as depreciation, telecommunications and computer-re-
lated expenses.

Print publishing cost of revenues consists primarily of the direct costs of
books sold to customers, product fulfillment, amortization of deferred publish-
ing costs such as author fees and royalty payments, license fees, and alloca-
tions of facilities and other shared costs.

E-commerce cost of revenues consists primarily of the direct costs of merchan-
dise sold to customers, and costs associated with credit card and other commis-
sions, product fulfillment, outbound shipping and handling costs, and alloca-
tions of facilities and other shared costs.

Product Development Costs
During its development and modification phase, Total Sports' TotalCast(TM)
software was intended for internal use only and not for sale to third-parties.
As such, all development costs related to the TotalCast(TM) software were
expensed as incurred.

Advertising
Total Sports expenses advertising costs as incurred. Advertising expense was
approximately $86,000 for the period February 20, 1997 through December 31,
1997 and $835,000 for the year ended December 31, 1998. Advertising expense was
approximately $235,000 and $817,000 for the six months ended June 30, 1998 and
1999, respectively. There were no advertising costs reported as assets at De-
cember 31, 1997 and 1998 or June 30, 1999.

Stock Compensation
Total Sports' stock option plan is accounted for in accordance with Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. To-
tal Sports follows the disclosure requirements of SFAS No. 123, Accounting for
Stock Based Compensation.

F-12
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

Warrants
Stock purchase warrants issued in connection with debt instruments are recorded
at amounts based on their relative estimated fair values at time of issuance
and credited to additional paid-in capital. The resulting debt discount is am-
ortized to interest expense over the term of the related debt using the inter-
est method.

Fair Value of Financial Instruments
Total Sports' financial instruments consist of cash and cash equivalents, trade
receivables, trade payables, line of credit and notes payable. The carrying
values of cash and cash equivalents, trade receivables and trade payables ap-
proximate fair value because of the short-term nature of these assets and lia-
bilities. The carrying values of the revolving line of credit approximates fair
value because the related interest rate is based on LIBOR The estimated fair
values of notes payable, which consist of fixed-rate borrowings, are based on
future cash flows discounted at 7.75%. The estimated fair value of notes pay-
able, including current maturities, at December 31, 1998 is approximately
$337,000, as compared to a carrying value of $343,503. The estimated fair value
of notes payable at June 30, 1999 is approximately $4,548,000, as compared to a
carrying value of $4,466,931.

Net Loss Per Share
Total Sports computes net loss per share in accordance with Statement of Finan-
cial Accounting Standards No. 128, Earnings Per Share. Basic and diluted net
loss per share is computed by dividing the net loss available to common stock-
holders for the period by the weighted-average number of shares of common stock
outstanding during the period. The calculation of diluted net loss per share
excludes potential shares of common stock if the effect is antidilutive. Poten-
tial shares of common stock are composed of incremental shares of common stock
issuable upon the exercise of potentially dilutive stock options and warrants
and upon conversion of Total Sports' preferred stock. Diluted net loss per
share presented in the accompanying consolidated financial statements is the
same as basic net loss per share because Total Sports had losses for all peri-
ods presented and inclusion of potential shares would therefore be
antidilutive.

Pro Forma Stockholders' Equity and Net Loss per Share (Unaudited)
The accompanying pro forma stockholders' equity and net loss per share reflect
(i) the redemption of the Series A redeemable preferred stock for $0.01 per
share, (ii) the conversion of all outstanding shares of Series B, C and C1
stock into an aggregate of shares of common stock and (iii) the
"cashless exercise" of 102,716 outstanding common stock warrants calculated us-
ing an assumed initial public offering price of $ per share (the midpoint
of the range), resulting in the issuance of shares of common stock.

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

Presentation
Certain amounts for 1997 have been reclassified to conform to the 1998 presen-
tation.

Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130, Re-
porting Comprehensive Income, and No. 131, Disclosures About Segments of an En-
terprise and Related Information. SFAS No. 130 requires that an enterprise (a)
classify items of other comprehensive income by their nature in a financial
statements and (b) display the accumulated balance of other comprehensive in-
come separately from retained earnings and additional paid-in capital in the
equity section of the balance sheet. Total Sports has adopted SFAS No. 130 as
of January 1, 1998, however, this standard does not currently impact disclo-
sures.

SFAS No. 131 requires that a public business enterprise report financial and
descriptive information about its reportable operating segments. This statement
defines operating segments as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief op-
erating decision maker in deciding how to allocate resources and in assessing
performance. Total Sports has adopted SFAS No. 131 as of January 1, 1998.

F-13
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, Accounting for the Cost of Computer Soft-
ware Developed or Obtained for Internal Use. SOP 98-1 is effective for finan-
cial statements for the years beginning after December 15, 1998. SOP 98-1 pro-
vides guidance over accounting for computer software developed or obtained for
internal use including the requirement to capitalize specified costs and amor-
tization of such costs. The adoption of SOP 98-1 during the six months ended
June 30, 1999 did not have a material effect on the reported results of opera-
tions, financial position or cash flows.

In June 1998, the Financial Accounting Standards Board issued Statement of Fi-
nancial Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities. This statement establishes accounting and reporting stan-
dards for derivative instruments, including certain derivative instruments em-
bedded in other contracts, (collectively referred to as derivatives) and for
hedging activities. It requires that an entity recognize all derivatives as ei-
ther assets or liabilities in the statement of financial position and measure
those instruments at fair value. In June 1999, the Financial Accounting Stan-
dards Board issued SFAS No. 137, Accounting for Derivative Instruments and
Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133.
This statement postpones the effective date of SFAS No. 133. Total Sports will
be required to adopt the new reporting guidelines for the fiscal year beginning
January 1, 2001. Total Sports has not fully analyzed the provisions of this
statement or its effects on Total Sports.

2. Business Acquisitions and Equity Investments

KOZ Acquisition
On March 31, 1997, Total Sports purchased certain assets and assumed certain
liabilities of the sports content business of KOZ inc., a related company, for
an aggregate cash purchase price of $1,414,240. This acquisition was financed
by borrowings under a line of credit (see Note 4). The purchase price was based
on KOZ inc.'s and Total Sports' managements' estimates of the amount of KOZ
inc.'s activities to date related to the business lines sold to Total Sports.
Because the owners of Total Sports at the date of the KOZ inc. acquisition were
also substantially the owners of KOZ inc., the assets acquired and liabilities
assumed were recorded at KOZ inc.'s book values. The excess of the purchase
price over the net book values of the assets and liabilities acquired has been
recorded by Total Sports as a charge to stockholders' equity. The following is
a summary of the KOZ inc. acquisition:

<TABLE>
<S> <C>
Current assets $ 120,546
Property and equipment 557,172
Liabilities assumed (550,000)
Charge to stockholders' equity 1,286,522
----------
$1,414,240
==========
</TABLE>

Sports Extra Acquisition
Concurrent with the KOZ acquisition, Total Sports purchased all the assets and
assumed all the liabilities of Sports Extra, Inc., an unrelated company, for an
aggregate purchase price of $233,548. The Sports Extra acquisition was funded
by forgiveness of a note receivable from Sports Extra of $100,000 and the issu-
ance of 290,323 shares of Total Sports' common stock valued at $133,548. Sports
Extra was merged into Sports Extra Acquisition Corporation, the surviving cor-
poration. The Sports Extra acquisition has been accounted for in accordance
with the purchase method of accounting and the accompanying consolidated finan-
cial statements of Total Sports reflect the purchase price allocated to assets
acquired and liabilities assumed based on their fair values as of the acquisi-
tion date. Goodwill resulting from the Sports Extra acquisition is being amor-
tized over 15 years. The following is a summary of the purchase price alloca-
tion in connection with the Sports Extra acquisition:

<TABLE>
<S> <C>
Property and equipment $ 7,049
Goodwill 631,142
Databases 293,039
Liabilities assumed (697,682)
---------
$ 233,548
=========
</TABLE>

F-14
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

Total College Communications Acquisition
In June 1998, Total Sports acquired the remaining 50% interest that it did not
own of Total College Communications Company for 418,971 shares of Total Sports'
common stock valued at $418,817. Total College Communications was merged into
Total Sports. The Total College Communication acquisition has been accounted
for in accordance with the purchase method of accounting and the accompanying
consolidated financial statements of Total Sports reflect the purchase price
allocated to assets acquired and liabilities assumed based on their fair values
as of the acquisition date. Goodwill resulting from the Total College Communi-
cation acquisition is being amortized over three years. The following is a sum-
mary of the purchase price allocation of the Total College Communication acqui-
sition:

<TABLE>
<S> <C>
Goodwill $ 496,384
Extinguishment of minority interest payable to joint venture
partner 28,152
Liabilities incurred in acquisition (42,719)
---------
$ 481,871
=========
</TABLE>

Golf.Com L.L.C. Investment
In May and July 1998, Total Sports invested a total of $250,000 for a 25% vot-
ing interest in Golf.Com L.L.C. At the time of the investment, Total Sports'
underlying ownership of Golf.com's net assets approximated $15,000. The
$235,000 difference has been accounted for as goodwill and is being amortized
over three years. Total Sports is using the equity method of accounting for the
Golf.com investment. As part of this investment, Total Sports assumed full con-
trol over the managerial and operation functions of the Golf.Com web site. In
addition, Total Sports assumed the liability for all operating expenses of run-
ning the web site for a five-year period. Total expenses charged to operations
under the agreement, excluding the cost of e-commerce merchandise, were approx-
imately $193,000 for 1998 and approximately $602,000 for the six months ended
June 30, 1999.

Under the agreement, Total Sports initially receives a 15% stake in Golf.Com's
net profits and losses. If under Total Sports management the Golf.Com web site
meets performance thresholds for both operating revenues and total web page
views, Total Sports will receive an annual 2.5% increase in its share of
Golf.Com's net profits and losses with a maximum aggregate increase of 10%. The
performance thresholds consist of achieving annual operating revenues progress-
ing from $1,160,000 to $2,106,000 and achieving annual page views of approxi-
mately 47,000,000 to 85,300,000 over a four year period. If the performance
thresholds are not met in any single year, but the thresholds are met in a sub-
sequent year, Total Sports will receive the current year's 2.5% increase as
well as all prior year's increases not previously granted. For the six months
ended December 31, 1998, Total Sports received 15% of Golf.Com's net loss of
approximately $160,000 totaling approximately $24,000. Total Sports is primar-
ily responsible for operating the Golf.Com web site and selling and arranging
advertising and sponsorship revenues on behalf of Golf.Com to be included on
the web site. Summarized financial information of Golf.Com as of December 31,
1998 is as follows:
<TABLE>
<CAPTION>
December 31,
1998
------------
(Unaudited)
<S> <C>
Total assets $ 302,752
Total liabilities $ 241,208
Net loss for the year ended December 31, 1998 $ 626,448
</TABLE>

Long Distance Technologies Acquisition
On June 4, 1999, Total Sports acquired 100% of the common stock of Long Dis-
tance Technologies, Inc. d/b/a Motortrax Interactive and subsequently merged it
into a wholly-owned subsidiary of Total Sports named Total Motorsports, Inc.
The Long Distance Technologies acquisition was funded by issuance of 284,401
shares of Total Sports' common stock valued at $3,227,951. The acquisition was
accounted for in accordance with the purchase method of accounting. The final
purchase price allocation has not been finalized. Preliminary goodwill result-
ing from the purchase of Long Distance Technologies is being amortized over a
period of 19 months, the remaining life of its contract with NASCAR. The fol-
lowing is a summary of the preliminary purchase price allocation of the Long
Distance Technologies acquisition:

<TABLE>
<S> <C>
Current assets $ 64,869
Property and equipment 110,896
Goodwill 3,293,793
Liabilities assumed (241,607)
----------
$3,227,951
==========
</TABLE>

F-15
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

The 284,401 shares of Total Sports' common stock issued as consideration in
the Long Distance Technologies acquisition are being held in escrow until any
and all indemnification claims or disputed claims notices have been satisfied.
One-third of the shares held in escrow, less any portion to be forfeited to
satisfy any indemnification claims, are due to be released on June 4, 2000,
subject to the occurrence of a significant event. The escrow agreement defines
a significant event as the effectiveness of a registration statement for the
sale of the shares held in escrow in a underwritten public offering registered
under the 1933 Act, or the consummation of a transaction or series of events
that result in the escrowed shares becoming publicly traded. If such a signif-
icant event occurs before June 4, 2000, then at that date escrowed shares with
a value in excess of $4.0 million shall be released from escrow, less any por-
tion subject to a disputed claims notice. Upon the occurrence of a significant
event after June 4, 2000, an additional amount of escrowed shares then in ex-
cess of $4.0 million shall be released, less any portion subject to a disputed
claims notice. The remainder of the escrowed shares shall be released December
4, 2000, to the extent the escrowed shares are not required to be forfeited in
satisfaction of indemnification claims or disputed claims notices.

The following unaudited pro forma information presents a summary of the con-
solidated results of operations of Total Sports as if the Long Distance Tech-
nologies acquisition occurred at January 1, 1998:

<TABLE>
<CAPTION>
--------------------------
Six Months
Year Ended Ended
December 31, June 30,
1998 1999
------------ -----------
(Unaudited)
<S> <C> <C>
Total Revenues $ 3,946,000 $ 4,724,000
Loss before preferred dividends $(14,474,000) $(8,341,000)
Net loss available for common shareholders $(14,672,000) $(8,438,265)
</TABLE>

In management's opinion, the unaudited pro forma information is not necessar-
ily indicative of actual results that would have occurred had the acquisition
been consummated at January 1, 1998, or of future operations of the combined
companies.

3. Property and Equipment

Property and equipment at December 31, 1997 and 1998 are summarized as fol-
lows:

<TABLE>
<CAPTION>
----------------------------------
Depreciable
Lives 1997 1998
----------- --------- ----------
<S> <C> <C> <C>
Fixtures and furniture 7 years $ 40,435 $ 108,502
Computer equipment 3 years 783,408 1,728,240
Software 3 years 110,699 251,749
Leasehold improvements 3-7 years 12,815
--------- ----------
Total 934,542 2,101,306
Less accumulated depreciation (192,486) (793,903)
--------- ----------
Property and equipment, net $ 742,056 $1,307,403
<CAPTION>
========= ==========
</TABLE>

Total Sports' property and equipment is pledged as collateral for its line of
credit and capital leases.

4. Credit Facility

Total Sports maintains a line of credit facility with a commercial lending in-
stitution in the amount of $3,500,000. This line of credit bears interest at
the LIBOR Market Index Rate plus 1.50% (7.18% and 6.60% at December 31, 1997
and 1998, respectively). Subsequent to December 31, 1998, Total Sports entered
into a series of renewals for the credit facility, which extended the maturity
date to November 30, 1999 and increased the facility by $500,000 until October
5, 1999 at the same terms and conditions. This credit facility is secured by
Total Sports' property and equipment and is personally guaranteed by Total
Sports' Chairman and Chief Executive Officer. The line of credit facility is
subject to certain covenants, all of which Total Sports is in compliance with
at December 31, 1998 and June 30, 1999.

F-16
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

The line of credit contains covenants restricting the ability of Total Sports
and any of its subsidiaries to materially alter its capital structure or busi-
ness without prior written consent. The specific prohibited actions are as fol-
lows:

. Material alteration in the kind or type of business

. Sale of substantially all of Total Sports' business or assets

. Acquisition of substantially all of the business or assets or more than
50% of the outstanding stock or voting power of any other entity

. Enter into any merger or acquisition

In March 1999, Total Sports renewed an irrevocable letter of credit for the
benefit of an office equipment vendor in the amount of $47,000 with an expira-
tion date of February 2, 2000.

5. Notes Payable

Notes payable outstanding at December 31, 1997 and 1998 and June 30, 1999 are
as follows:

<TABLE>
<CAPTION>
--------------------------------
December 31,
--------------------- June 30,
1997 1998 1999
--------- --------- ----------
<S> <C> <C> <C>
Notes Payable
Note payable for baseball publication
assumed in Sports Extra acquisition,
payable in annual installments of
$6,992 each January 1 through 2001,
including interest at 7.2% $ 23,583 $ 18,287 $ 12,990
Note payable for baseball, football and
basketball databases, payable in $5,000
installments on January 1 and June 1
each year through June 1, 2005,
including interest at 7.2% 60,577 54,109 47,913
Note payable for hockey database
license, payable in annual installments
of $50,000 on August 1 through 2002,
and payments of $75,000 on August 1,
2003 and 2004, including interest at
7.2% -- 271,107 271,107
Convertible promissory note payable due
May 31, 2000, with interest at 10.0% -- -- 3,800,832
<CAPTION>
--------- --------- ----------
<S> <C> <C> <C>
Total notes payable 84,160 343,503 4,132,843
Less current maturities of notes payable 16,992 42,392 3,844,073
<CAPTION>
--------- --------- ----------
<S> <C> <C> <C>
Notes payable, net of current maturities $ 67,168 $ 301,111 $ 288,770
<CAPTION>
========= ========= ==========
<S> <C> <C> <C>
Notes Payable--Related Parties
Promissory note payable to First Raleigh
Telex, payable monthly through March
2002 with interest at 9.0%,
collateralized by computer/digital
equipment $ -- $ -- $ 114,921
Note payable to related party due
December 31, 1999, with interest at
16.0% -- -- 20,000
<CAPTION>
--------- --------- ----------
<S> <C> <C> <C>
Total notes payable--related parties -- -- 134,921
Less current maturities of notes payable--
related parties -- -- 67,884
<CAPTION>
--------- --------- ----------
<S> <C> <C> <C>
Notes payable--related parties, net of
current maturities $ -- $ -- $ 67,037
<CAPTION>
========= ========= ==========
</TABLE>

In conjunction with the note payable for hockey databases, Total Sports issued
a warrant for 20,000 shares of common stock at an exercise price of $7.106 per
share, exercisable within 10 years. Additionally, Total Sports granted a war-
rant for 39,888 shares of common stock valued at $217,000 on the date of grant.
The warrants are exercisable through June 4, 2009 at an exercise price of
$25.07 per share in connection with the convertible promissory note payable is-
sued in June 1999. The note may be converted into equity at the next round of
equity financing. The warrants were subsequently

F-17
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

adjusted to be exercisable for 60,277 shares of common stock at an exercise
price of $16.59 per share upon the sale of Series D preferred stock by Total
Sports.

6. Lease Commitments

Total Sports leases certain equipment under various operating leases. These
leases contain renewal clauses for terms of one to three years, with adjust-
ments in annual rentals for inflationary increases. Rental expense charged to
operations for all operating leases totaled approximately $102,000 during 1997
and $85,000 during 1998. As of December 31, 1998, future minimum lease commit-
ments on leases that had initial or remaining non-cancelable lease terms of one
year or longer, are as follows:

<TABLE>
<S> <C>
1999 $ 185,435
2000 60,746
2001 27,356
2002 17,769
2003 8,884
---------
Total minimum lease payments $ 300,190
=========
</TABLE>

Total Sports leases certain computer equipment under noncancelable leasing ar-
rangements, collateralized by the equipment, which are classified as capital
leases. The asset balance related to capital leases totaled $215,434 at Decem-
ber 31, 1998. Amortization expense related to assets from capitalized leases
was $36,696 for the year ended December 31, 1998.

As of December 31, 1998, future minimum lease payments for capital leases that
have initial or remaining terms in excess of one year are as follows:

<TABLE>
<S> <C>
1999 $ 102,852
2000 102,852
2001 39,041
---------
Total minimum lease payments 244,745
Less amount representing executory costs 9,699
---------
Net minimum payments due 235,046
Less amount representing interest (11% to 26%) 39,416
---------
Present value of future minimum lease payments 195,630
Less current portion 73,972
---------
Long-term portion of capital lease obligations $ 121,658
=========
</TABLE>

On August 8, 1999, Total Sports entered into a ten-year lease for office space
with First Raleigh Telex, LLC. Frank Daniels, Jr., a Total Sports director and
stockholder, is the beneficial owner of First Raleigh Telex.

F-18
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

7. Income Taxes

The components of Total Sports' net deferred tax asset (liability) as of Decem-
ber 31, 1997 and 1998, is as follows:

<TABLE>
<CAPTION>
-------------------------
1997 1998
----------- -----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 1,314,000 $ 5,317,000
Accrued vacation and salaries 10,000 68,000
Bad debt and sales return reserves 15,000 173,000
Inventory allowance 129,000
Depreciation 53,000 79,000
Amortization of goodwill 26,000
Other 33,000 43,000
----------- -----------
Total deferred tax assets 1,425,000 5,835,000
----------- -----------
Valuation allowance (1,425,000) (5,835,000)
----------- -----------
Net deferred tax assets $ 0 $ 0
=========== ===========
</TABLE>

Based on management's evaluation of the positive and negative evidence im-
pacting the realizability of the deferred tax assets, a valuation allowance has
been provided. Management has considered Total Sports' history of losses and
concluded that as of December 31, 1997 and 1998, the net deferred tax assets
should be fully reserved as it is more likely than not the deferred tax assets
will not be realized.

For the periods ended December 31, 1997 and 1998, reported income taxes differ
from income tax benefit that would result from applying the federal statutory
rate of 34% to pretax loss due to the following:

<TABLE>
<CAPTION>
-------------------------
1997 1998
----------- -----------
<S> <C> <C>
Computed expected tax benefit $(1,259,000) $(3,797,000)
State income tax benefit, net of federal
benefit (189,000) (571,000)
Other 23,000 (42,000)
Change in valuation allowance 1,425,000 4,410,000
----------- -----------
Income tax benefit 0 0
=========== ===========
</TABLE>

Total Sports has operating and economic loss carryforwards of approximately
$13,600,000 at December 31, 1998 expiring through 2018, which can be offset
against future federal and state taxable income. Under the Tax Reform Act of
1986, the amounts of and benefits from net operating losses carried forward may
be impaired or limited in certain circumstances. Events which might cause limi-
tations in the amount of net operating losses that Total Sports may utilize in
any one year include, but are not limited to, a cumulative change in ownership
of more than 50% over a three-year period. At December 31, 1998, the effect of
such limitations, if imposed, is not expected to be significant.

8. Stockholders' Equity

Series A Redeemable Preferred Stock
In June 1997, Total Sports raised net proceeds of $750,998 from the issuance of
100,000 shares of Series A redeemable preferred stock and $179,000 from the is-
suance of warrants to purchase 365,218 shares of common stock at $0.01 per
share to one institutional investor and one individual investor. These warrants
expire in June 2007 and are exercisable upon the occurrence of an extraordinary
event. An extraordinary event is defined as follows:

. A merger, consolidation, sale or reorganization in which Total Sports or
any of its subsidiaries is not the surviving corporation and in which
the warrant holders receive cash or securities.

F-19
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

. The consummation of a registered public offering of common stock or
other equity interests of Total Sports

. A sale, lease or exchange, directly or indirectly, of all or
substantially all of the property and assets of Total Sports, whether or
not in the ordinary course of business, in which the warrant holders
receive cash or securities.

In conjunction with the execution of the Series A offering, Total Sports issued
to the placement agent warrants to purchase 6,598 shares of common stock with
an exercise price of $3.44 per share. The warrants expire upon the earliest to
occur of (a) June 2002 (b) the acquisition of Total Sports or (c) the consumma-
tion of an initial public offering of common stock or other equity interests of
Total Sports. Concurrent with the Series A offering, an advance from a stock-
holder of $250,000 was converted into 25,000 shares of Series A stock.

Unless previously redeemed, all shares of Series A stock shall, at the option
of the holders of a majority of the issued and outstanding shares of Series A
stock, be redeemed by Total Sports at a price per share of $10.00 plus all ac-
crued and unpaid dividends upon the earlier of (a) June 2, 2002 or (b) an ex-
traordinary or liquidating event, as defined above. The carrying value of the
Series A stock is increased by periodic accretion, in the form of accrued divi-
dends, so that the carrying value will equal the mandatory redemption value on
the mandatory redemption date of June 2, 2002. During 1997 and 1998, such ac-
cretion totaled $16,680 and $47,645, respectively.

Upon the occurrence of an extraordinary event, as defined above, Series A
stockholders will calculate the annual internal rate of return on the common
stock exercisable under their warrants. If the internal rate of return is less
than 45%, then the stockholders may require redemption by Total Sports at a
price per share of $10.00 plus all accrued and unpaid dividends. If the inter-
nal rate of return is greater than 45%, then Total Sports may redeem the Series
A stock and all accrued and unpaid dividends at the extraordinary event redemp-
tion price of $0.01 per share. At June 30, 1999, the price per share required
to achieve greater than 45% internal rate of return is $9.51.

Series B Convertible Preferred Stock
In November 1997, Total Sports raised net proceeds of $1,936,935 from the issu-
ance of 445,263 shares of Series B stock to an institutional investor and sev-
eral individual investors. In conjunction with this transaction, Total Sports
issued to the placement agent warrants to purchase 8,285 shares of common stock
with an exercise price of $4.94 per share. Such warrants expire upon the earli-
est to occur of (a) June 2002 (b) the acquisition of Total Sports or (c) the
consummation of an initial public offering of common stock or other equity in-
terests of Total Sports.

Series C Convertible Preferred Stock
In August 1998, Total Sports raised net proceeds of $9,775,971 from the issu-
ance of 1,418,200 shares of Series C stock to both institutional and individual
investors. In conjunction with this transaction, Total Sports issued to the
placement agent warrants to purchase 31,458 shares of common stock with an ex-
ercise price of $7.82 per share. Such warrants expire upon the earliest to oc-
cur of (a) June 2003 (b) the acquisition of Total Sports or (c) the consumma-
tion of an initial public offering of common stock or other equity interests of
Total Sports.

Series C1 Convertible Preferred Stock
In December 1998, Total Sports received a $1,000,000 contribution of capital
towards the purchase of Series C1 stock from several existing stockholders . In
January and April 1999, Total Sports raised net proceeds of $5,780,356,
$1,000,000 of which was advanced by existing stockholders in December 1998,
from the issuance of 630,756 shares of Series C1 stock both institutional and
individual investors. In conjunction with these transactions, Total Sports is-
sued to the placement agent warrants to purchase 12,907 shares of common stock
with an exercise price of $10.44 per share. Such warrants expire upon the ear-
liest to occur of (a) January 2004 (b) the acquisition of Total Sports or (c)
the consummation of an initial public offering of common stock or other equity
interests of Total Sports.

Preferred Stock Conversion Rights
Each holder of Series B, Series C, and Series C1 stock shall have the right to
convert all or any portion of such shares at any time into shares of Total
Sports' common stock at an initial conversion rate of 1:1. Upon either comple-
tion of a public offering of common stock of at least $20 million and a per
share price greater than $7.106 or the written consent of 80% of the Series B,
Series C, and Series C1 stockholders, all of the outstanding Series B, Series
C, and Series C1 shares automatically convert into shares of common stock at
the conversion rate then in effect.

F-20
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

Preferred Stock Dividend Rights
The holders of the Series A stock are entitled to receive cumulative dividends
of $1.20 per share per annum, payable quarterly, when and if declared by Total
Sports' Board of Directors. To the extent not paid on the quarterly payment
date, all dividends which have accrued on each share of Series A stock out-
standing during the period ending upon each quarterly payment date shall be ac-
cumulated and remain accumulated dividends with respect to such shares until
paid to holders thereof. So long as any share of Series A stock remains out-
standing, no dividends shall be paid upon, or declared or set apart for, the
Series B convertible preferred stock, the Series C convertible preferred stock,
or the Series C1 convertible preferred stock or common stock or any other class
of stock, unless and until all cumulative dividends on the then outstanding Se-
ries A Redeemable for all past dividend periods have been or concurrently shall
be paid. Dividends of $127,500 and $150,000 were accrued on the Series A stock
in 1997 and 1998, respectively. These dividends, in addition to the accreted
dividends discussed above, are reflected as the total increases in the carrying
value of Series A stock in the accompanying consolidated financial statements.

After all cumulative dividends on the then outstanding shares of Series A stock
for all past dividend periods have been paid, the holders of Series B, Series
C, and Series C1 stock are entitled to receive the following pro-rata annual
dividends per share, payable quarterly, when declared by Total Sports' Board of
Directors:

<TABLE>
<S> <C>
Series B $ 0.54
Series C $ 0.85
Series C1 $ 1.14
</TABLE>

To the extent not paid on the quarterly payment date, all dividends which have
accrued on each share of Series B, Series C and Series C1 stock outstanding
during the period ending upon each quarterly payment date shall be accumulated
and remain accumulated dividends with respect to such shares until paid to
holder thereof or converted into shares of common stock in accordance with the
conversion privileges. Upon conversion of Series B, Series C and Series C1
stock into shares of common stock in accordance with the conversion privileges,
any outstanding accumulated dividends shall be forfeited upon such conversion.
Subject to the restrictions referred to above related to Series A dividends, if
any shares of Series B stock remain outstanding on November 11, 2002 and Series
C and Series C1 stock remain outstanding on July 31, 2003, then all accumulated
and unpaid dividends on Series B, Series C and Series C1 stock shall be paid in
cash to the holders thereof.

At December 31, 1998, cumulative unpaid dividends on the Series B and Series C
stock were as follows:

<TABLE>
<S> <C>
Series B $ 420,774
Series C $ 602,735
----------
Total $1,023,509
<CAPTION>
==========
</TABLE>

No dividends have been declared on the Series B, Series C and Series C1 stock
and accordingly no liability has been recorded.

Preferred Stock Liquidation Privileges
Upon the dissolution, liquidation, or winding up of Total Sports, whether vol-
untary or involuntary, the holders of outstanding Series A stock shall be enti-
tled to receive $10 in cash for each share of Series A stock, together with all
accrued and unpaid dividends. If upon such liquidating event the assets of To-
tal Sports are insufficient to permit the payment of the Series A liquidation
value, the assets of Total Sports shall be distributed to the holders of Series
A stock ratably until the holders shall have received the full amount to which
they would otherwise be entitled.

Upon the dissolution, liquidation, or winding up of Total Sports, whether vol-
untary or involuntary, the holders of outstanding Series B, Series C and Series
C1 stock shall be entitled to receive the following liquidation rates in cash
for each share of Series B, Series C and Series C1 stock, together with all ac-
crued and unpaid dividends:

<TABLE>
<S> <C>
Series B $ 4.492
Series C $ 7.106
Series C1 $ 9.49
</TABLE>

F-21
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

If upon such liquidating event, the assets of Total Sports are insufficient to
permit the payment of the Series B, Series C and Series C1 liquidation values,
the assets of Total Sports shall be distributed to the holders of Series B, Se-
ries C and Series C1 stocks ratably until the holders shall have received the
full amount to which they would otherwise be entitled.

Preferred Stock Covenants
All of Total Sports' preferred stock investment agreements contain covenants
restricting the ability of Total Sports and any of its subsidiaries without
prior written consent to among other things:

. Incur or assume additional indebtedness or obligations

. Incur liens

. Engage in mergers, acquisitions or asset sales

. Declare dividends or redeem or repurchase capital stock

. Engage in transactions with affiliates

Common Stock
Total Sports was originally capitalized with cash of $650,000 from a founding
stockholder. In February 1997, Total Sports issued 961,291 shares to founders
and related parties in connection with the incorporation of Total Sports.

As discussed in Note 2, Total Sports has issued common stock as consideration
in connection with the following acquisitions:

<TABLE>
<CAPTION>
-------------------------------
Number of
Acquired Entity Transaction Date Common Shares
--------------- ---------------- -------------
<S> <C> <C>
Sports Extra March 31, 1997 290,323
December 22,
DesigNet 1997 33,142
Total College Communications June 2, 1998 418,971
Long Distance Technologies, Inc. June 4, 1999 284,401
</TABLE>

In May 1997, Total Sports issued warrants to purchase 16,200 shares of common
stock to two founding stockholders exercisable at $3.42 per share and expiring
upon the earliest to occur of (a) May 2007, (b) the acquisition of Total Sports
or (c) the consummation of an initial public offering of common stock or other
equity interests of Total Sports. No value was attributed to these warrants us-
ing the Black-Scholes model, because the exercise price was significantly
greater than the market value of the common stock on the date of grant. The
fair value of the common stock warrants was calculated on the date of the grant
with the following assumptions: dividend yield of 0%; risk-free rates of ap-
proximately 6%; and expected lives of 10 years.

The terms of Total Sports' Certificate of Incorporation prohibit the payment of
dividends to common stockholders prior to payment of all accumulated dividends
on preferred stock.

On March 26, 1999, in connection with the refinancing of the $3,500,000 line of
credit as discussed in Note 4, Total Sports' Board of Directors approved the
issuance of 18,550 shares of common stock valued at $1.80 per share to its
Chairman and Chief Executive Officer. The Chairman and Chief Executive Officer
received these shares for his personal guarantee of Total Sports' line of
credit until July 15, 1999. The total value of these shares has been included
in interest expense for the six months ended June 30, 1999.

F-22
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

9. Stock Options and Warrants

Stock Options
Total Sports has a stock option plan pursuant to which employees, officers, and
directors of Total Sports may be granted stock options to acquire up to a maxi-
mum of 100,000 shares of Total Sports' common stock. On March 26, 1999, the
Board of Directors approved an increase in the employee option pool to 10% of
fully diluted shares outstanding. This resulted in an increase of approximately
470,000 shares. All options granted vest over a three-year period as follows:
25% at the end of year one, an additional 25% at the end of year two and the
remaining 50% at the end of year three. Incentive stock option exercise prices
are no less than 100% of the fair market value of the common stock at the date
of grant, as determined by Total Sports' Board of Directors. Non-qualified
stock options issued to directors have an exercise price of $0.01. Vested op-
tions may be exercised for a period of up to ten years from the date of grant.

A summary of Total Sports' option plan as of December 31, 1997 and 1998 and
changes during the period February 20, 1997 through December 31, 1997 and the
year ended December 31, 1998 is presented below:

<TABLE>
<CAPTION>
-------------------------------------------
1997 1998
--------------------- ---------------------
Weighted- Weighted-
Average Average
Exercise Exercise
Shares Price Shares Price
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Outstanding at beginning of
year -- $ -- 20,538 $ 0.50
Granted 20,538 0.50 77,444 0.71
Exercised -- -- (280) 0.50
Terminated -- -- (7,089) 0.71
--------- ---------
Outstanding at end of year 20,538 $ 0.50 90,613 $ 0.66
========= =========
Options exercisable at year-
end -- $ -- 9,437 $ 0.50
========= =========
</TABLE>

The following table summarizes information about fixed stock options outstand-
ing at December 31, 1998:

<TABLE>
<CAPTION>
---------------------------------------------------------
Options Outstanding Options Exercisable
---------------------------------- --------------------------
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
-------- ----------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
$0.01 4,800 9 $ 0.01 300 $ 0.01
0.50 26,254 9 0.50 6,354 0.50
0.55 11,131 4 0.55 2,783 0.55
0.75 40,161 9 0.75 -- --
1.25 8,267 10 1.25 -- --
--------- ---------
90,613 8 $ 0.66 9,437 $ 0.50
========= =========
</TABLE>

F-23
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

During 1997 and 1998, the fair value of each option grant was estimated on the
date of the grant using the Black-Scholes option-pricing model with the follow-
ing assumptions:

<TABLE>
<CAPTION>
---------------------
1997 1998
--------- ---------
<S> <C> <C>
Exercise price less than market price on date of
grants:
Weighted-average exercise price -- $ 0.71
Weighted-average grant-date fair value -- $ 0.42
Exercise price equal to market price on date of
grants:
Weighted-average exercise price $ 0.50 --
Weighted-average grant-date fair value $ 0.47 --
Dividend yield 0 % 0 %
Risk-free interest rate 6 % 5 %
Expected lives 4 years 3 years
</TABLE>

Had compensation cost for stock options granted in 1997 and 1998 been deter-
mined consistent with SFAS No. 123, the effect on Total Sports' net loss for
1997 and 1998 would have been to increase the net loss by $500 in 1997 and
$7,000 in 1998, and would not have changed basic or diluted net loss per share
in 1997 or 1998.

On January 20, 1999, Total Sports issued 2,424 incentive stock options to em-
ployees at an exercise price of $1.50 per share. For attendance at 1998 board
meetings, Total Sports issued 4,800 non-qualified stock options to directors
with an exercise price of $0.01 per share, with terms of ten years each. During
the six months ended June 30, 1999, Total Sports issued another 9,300 non-qual-
ified stock options with the same terms to directors for attendance at 1999
meetings. On May 1, 1999, Total Sports issued approximately 290,000 incentive
stock options to employees with an exercise price of $10.20 per share, with
terms of ten years.

Common Stock Warrants
Total Sports granted common stock warrants to preferred stockholders and issued
agent's warrants in connection with financing transactions during 1997 and
1998. All warrants granted have terms of five to ten years. All warrants are
fully exercisable at December 31, 1998 except for 365,218 warrants that are ex-
ercisable upon an extraordinary event defined as a reorganization, merger, ini-
tial public offering, sale of all assets or sale of substantially all assets. A
summary of the outstanding common stock warrants as of December 31, 1997 and
1998 and changes during the period February 20, 1997 through December 31, 1997
and the year ended December 31, 1998 is presented below:

<TABLE>
<CAPTION>
-------------------------------------------
1997 1998
--------------------- ---------------------
Weighted- Weighted-
Average Average
Exercise Exercise
Warrants Price Warrants Price
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Outstanding at beginning of
year -- $ -- 396,301 $ 0.31
Granted 396,301 0.31 377,226 7.22
--------- ---------
Outstanding at end of year 396,301 $ 0.31 773,527 $ 3.63
========= =========
</TABLE>

The estimated weighted-average grant-date fair value of common stock warrants
granted during the period February 20, 1997 through December 31, 1997 and the
year ended December 31, 1998 are as follows:

<TABLE>
<CAPTION>
---------------------
1997 1998
--------- ---------
<S> <C> <C>
Exercise price less than market price on date of
grants:
Weighted-average exercise price $ 0.01 --
Weighted-average grant-date fair value $ 0.49 --
Exercise price greater than market price on date of
grant:
Weighted-average exercise price $ 3.43 $ 7.12
Weighted-average grant-date fair value $ -- $ --
</TABLE>

F-24
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

The following table summarizes information about common stock warrants out-
standing at December 1998:

<TABLE>
<CAPTION>
----------------------------------
Common Stock Warrants Outstanding
----------------------------------
Weighted-
Average Weighted-
Range of Remaining Average
Exercise Number Contractual Exercise
Prices Outstanding Life Price
-------- ----------- ----------- ---------
<S> <C> <C> <C>
$ 0.01 365,218 8 $ 0.01
$3.42-$3.44 22,798 8 3.43
$4.49-$4.94 15,553 4 4.73
$7.11-$7.82 369,958 6 7.17
---------
773,527 7 $ 3.63
=========
</TABLE>

In connection with the Series C1 financing, Total Sports issued to the place-
ment agent warrants to purchase 12,907 shares of common stock with an exercise
price of $10.44 per share during January and April 1999.

Total Sports granted warrants to purchase 39,888 shares of common stock exer-
cisable by June 4, 2009 with an exercise price of $25.07 per share in connec-
tion with the convertible promissory note payable issued during 1999. The note
may be converted into equity at the next round of preferred financing. The war-
rants were subsequently adjusted to be exercisable for 60,277 shares of common
stock at an exercise price of $16.59 per share upon the sale of Series D pre-
ferred stock by Total Sports. The fair value of the warrants was calculated on
the date of grant and is being amortized to interest expense over the life of
the note payable. These warrants were immediately exercisable for Total Sports'
common stock and expire on May 31, 2009.

Series B Preferred Warrants
Total Sports granted warrants to purchase 73,578 shares of Series B stock to
preferred stockholders in connection with bridge financing transaction during
1998. All warrants granted were immediately vested and have terms of ten years.
The warrants have an exercise price of $4.49 per share, grant date fair values
ranging from $0.42-$2.25, and remaining contractual lives of nine years. The
fair value was calculated on the date of the grant with the following assump-
tions: volatility of approximately 27%; dividend yield of 0%; risk-free rates
of approximately 5%; and expected lives of ten years. These warrants will be
exercisable for Total Sports' common stock upon conversion of the Series B
stock.

10. Earnings Per Share

Total Sports computes earnings per share data in accordance with the require-
ments of Statement of Financial Accounting Standards No. 128, Earnings per
share. The following table reflects the calculation of basic and diluted earn-
ings per share.

<TABLE>
<CAPTION>
-------------------------
Period
February 20, Six Months Ended
1997 through Year Ended ----------------------
December 31, December 31, June 30, June 30,
1997 1998 1998 1999
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Net loss applicable to
common shareholders:
Net loss $3,699,580 $11,163,673 $4,079,705 $6,915,362
Dividends on preferred
stock 127,500 150,000 75,000 75,000
Accretion of redeemable
preferred stock 16,680 47,645 23,691 21,965
---------- ----------- ---------- ----------
Net loss applicable to
common shareholders 3,843,760 11,361,318 4,178,396 7,012,327
Earnings per share--basic
Weighted-average shares
outstanding 1,214,419 1,560,903 1,367,496 1,770,917
========== =========== ========== ==========
Net loss per share--basic
and diluted $ (3.17) $ (7.28) $ (3.06) $ (3.96)
========== =========== ========== ==========
</TABLE>

F-25
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

The following securities and number of shares have been excluded from the di-
luted per share computation as they are antidilutive:

<TABLE>
<CAPTION>
------------------------------------
December 31, December 31, June 30,
1997 1998 1999
------------ ------------ ---------
<S> <C> <C> <C>
Redeemable preferred stock--Series A 125,000 125,000 125,000
Convertible preferred stock--Series B 445,263 445,263 445,263
Convertible preferred stock--Series C -- 1,418,200 1,418,200
Convertible preferred stock--Series
C1 -- -- 630,756
Preferred stock warrants--Series B -- 73,578 73,578
Common stock held in escrow -- -- 284,401
Common stock warrants 396,301 773,527 826,322
Common stock options 20,538 90,613 386,493
</TABLE>

11. Segment Information

Total Sports is engaged primarily in digital and print publishing and e-com-
merce. Significantly all of Total Sports' revenues are to customers located
within the United States and significantly all long-lived assets are in the
United States.

<TABLE>
<CAPTION>
------------------------------------------------------------------
Period February 20, 1997 through
December 31, 1997 Year ended December 31, 1998
-------------------------------- ---------------------------------
Digital Print E-Commerce Digital Print E-Commerce
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 738,019 $ 257,344 $ 13,586 $2,082,979 $1,314,692 $ 435,172
Depreciation and
amortization expense 219,359 35,284 799 673,972 66,225 20,298
Equity in earnings
(losses) of affiliates -- -- -- (24,076) -- --
Interest Income 3,814 1,305 -- 8,158 10,174 --
Interest Expense 74,750 25,586 -- 228,307 279,041 --
Net Loss 1,965,358 1,522,417 211,805 5,708,379 4,697,630 757,664
Assets 1,609,226 977,418 51,571 3,628,279 1,593,690 59,788
Capital expenditures 267,677 59,938 29,756 685,431 42,884 12,509

<CAPTION>
------------------------------------------------------------------
Six months ended June 30, 1998 Six months ended June 30, 1999
-------------------------------- ---------------------------------
Digital Print E-Commerce Digital Print E-Commerce
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenues $1,075,871 $ 492,717 $ 81,268 $2,935,480 $1,040,563 $ 701,111
Depreciation and
amortization expense 241,570 31,265 9,671 732,397 37,503 10,977
Interest Income 4,075 -- -- 3,326 $ 1,953 --
Interest Expense 146,786 179,405 -- 101,583 59,659 --
Net Loss $2,041,346 $1,730,467 $ 307,892 $3,616,686 $2,405,917 $ 892,759
</TABLE>

Barter revenues from one customer of Total Sports' digital publishing segment
represents approximately $336,800 or 12% of 1998 consolidated revenues.

12. Employee Benefit Plan

Total Sports has a 401(k) plan for all eligible employees. Total Sports pro-
vides a 50% matching contribution of up to 6% of employee contributions. Em-
ployer contributions vest over a four-year period as follows: -0-% at the end
of year one, 33% at year two, 67% at year three, and 100% at year four. Total
Sports' contribution amounted to $41,863 in 1997 and $84,566 in 1998.

13. Health Insurance Plan

During 1997, Total Sports began providing medical and health insurance to its
full-time employees under a partial self-insurance plan administered by an out-
side insurer. Under the provisions of the plan, Total Sports is responsible for
claims filed by eligible employees up to $10,000 per employee per term year,
with a lifetime liability of $2,000,000 per employee.

F-26
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

During the period February 20, 1997 to December 31, 1997, Total Sports incurred
claims by eligible employees of approximately $88,200. During the year ended
December 31, 1998, Total Sports incurred claims by eligible employees of ap-
proximately $146,000. A liability of approximately $16,000 was recorded for the
amount of claims incurred but not paid prior to December 31, 1997. A liability
of approximately $28,000 was recorded for the amount of claims incurred but not
paid prior to December 31, 1998.

14. Commitments and Contingencies

On May 18, 1998, Total Sports was served with a demand letter from a company
requesting payment of approximately $850,000 relating to losses suffered by
that company in connection with a defunct joint project it had entered into
with Total Sports and a third company. On December 28, 1998, Total Sports re-
ceived a release of any liability against it, its officers and its employees in
exchange for transfer of ownership of an internet web address.

Total Sports is involved in other legal actions arising in the normal course of
business. In the opinion of management, based on a review of these legal pro-
ceedings, the ultimate outcome of these actions will not have a material effect
on the consolidated financial statements.

Total Sports has entered into employment agreements with several key employees.
The agreements generally provide annual base salary and termination provisions.
The minimum commitments under the agreements are set forth in the following ta-
ble:

<TABLE>
<S> <C>
1999 $ 502,500
2000 277,500
---------
Total commitments $ 780,000
=========
</TABLE>

15. Related Party Transactions

KOZ inc., Total College Communications, Host Communications (joint venture
partner until June 1998 and a stockholder until May 1999), Winstar New Media
(preferred stockholder), Bull Run Corporation Media (preferred stockholder),
Carolina Financial Services LLC (warrant holder and common ownership), and the
Josephus Group (common ownership) are considered related parties of Total
Sports.

Total Sports entered into a radio show and advertising agreements with an af-
filiate of Winstar New Media as part of the Series C1 1998 financing. Total
Sports incurred approximately $344,280 in expenses for the radio show sponsor-
ship and advertising during 1998. Included in accrued expenses--related party
at December 31, 1998, was $188,819 due to the Winstar affiliate. During the six
months ended June 30, 1999, Total Sports incurred $11,900 in advertising ex-
penses from Winstar.

Total Sports recognized $818,000 in sponsorship revenue from Host Communica-
tions in the year ended December 31, 1998. Additionally, at December 31, 1998,
Total Sports had expenses of $66,000 recorded in accrued expenses--related
party due to Host Communications. During the six months ended June 30, 1999,
Total Sports recognized approximately $1,142,000 in sponsorship revenues and
incurred $224,000 in commission expenses from Host Communications.

Total Sports incurred fees related to the different financing rounds from Caro-
lina Financial Services LLC totaling approximately $62,500 for the period ended
December 31, 1997, $249,000 for the year ended December 31, 1998 and $124,000
for the six months ended June 30, 1999.

During 1998, Total Sports recognized $25,000 in sponsorship revenue from
Rawlings, a company owned by the Bull Run Corporation.

Total Sports leased office space from the Josephus Group during 1997 and 1998.
Total Sports incurred rent expense to the Josephus Group of approximately
$107,000 during the period February 20, 1997 through December 31, 1997, $75,000
during the year ended December 31, 1998 and $54,000 for the six months ended
June 30, 1999.

F-27
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Continued)

Total Sports has accrued a liability of $75,000 for compensation to its Chair-
man and Chief Executive Officer related to services performed prior to February
20, 1997. For the period from February 20, 1997 to December 31, 1997 and the
year ended December 31, 1998, the Chairman and Chief Executive Officer did not
receive any compensation. During the six months ended June 30, 1999, the Chair-
man and Chief Executive Officer received the $75,000 previously accrued.

During 1998, the Chairman and Chief Executive Officer received 37,100 shares of
common stock valued at $1.15 per share for his personal guarantee of Total
Sports' line of credit. In connection with the refinancing of the line of
credit on January 15, 1999 as discussed in Note 5, Total Sports' Board of Di-
rectors issued 18,550 shares of common stock valued at $1.80 per share to its
Chairman and Chief Executive Officer for his personal guarantee of the line of
credit.

On August 6, 1998, Total Sports entered into a consulting agreement with a To-
tal Sports director, whereby Total Sports issued 14,073 shares of common stock
valued at $1.25 per share to the director for consulting services previously
provided and to be provided. Either party has the right to terminate the agree-
ment at any time with at least thirty days prior written notice. Total costs of
this agreement charged to operations were $17,591.

On August 8, 1999, Total entered into a 10-year lease for office space with
First Raleigh Telex, LLC. Frank Daniels, Jr., a Total Sports director and
stockholder, is the beneficial owner of First Raleigh Telex, LLC. The lease
terms call for monthly rent of approximately $25,000 until November 1, 1999 and
monthly rent of $29,733 thereafter. Total recognized approximately $77,000 in
rent expense to First Raleigh Telex, LLC during the six months ended June 30,
1999 before the lease agreement was finalized.

As discussed in Note 5, Total Sports entered into a three-year promissory note
with First Raleigh Telex in the amount of $114,921 during 1999. During the six
months ended June 30, 1999, Total made payments totaling approximately $12,000
on the note and recognized interest expense of approximately $1,000.

As discussed in Note 5, Total Sports assumed a $20,000 note payable during the
Long Distance Technologies acquisition. The note was payable to the president
of Long Distance Technologies, who became a stockholder of Total Sports upon
consummation of the acquisition. The note is due December 31, 1999.

In September 1999 and November 1999, Total Sports issued 10% convertible prom-
issory notes in the aggregate principal amount of $2,500,000 and warrants exer-
cisable for an aggregate of 15,067 shares of common stock at an exercise price
of $16.59 per share. Winstar Interactive Ventures, Piedmont Venture Partners,
and Nuray Tellwide Properties Limited all Total Sports shareholders, partici-
pated in $2,000,000 of the $2,500,000 and received warrants for 12,053 shares
of common stock.

16. Subsequent Events

Series D Preferred Stock

On November 12, 1999, Total Sports raised gross proceeds of approximately
$35,500,000 from the issuance of 2,140,955 shares of Series D preferred stock
and warrants exercisable for an aggregate 963,407 shares of Series D1 preferred
stock, at an exercise price of $16.59 per share to a venture capital fund, var-
ious companies and several individual investors. The Series D and D1 preferred
stock is initially convertible into common stock on a ratio of one-to-one. In
the event that the per share price of common stock sold in an initial public
offering is less than $33.18, the conversion ratio of the Series D preferred
stock will be adjusted so that holders of Series D preferred stock will be en-
titled to receive additional common stock so that each preferred share will be
convertible into $33.18 of common stock. Under the provision of Emerging Issues
Task Force Abstract 98-5, Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios, in the event
of an initial public offering, Total Sports will be required to record the ben-
eficial conversion features associated with the Series D preferred as a divi-
dend of $35,500,000. This non cash dividend will be credited to additional paid
in capital. In conjunction with this transaction, Total Sports issued 45,961
agents warrants at an exercise price of $18.25 per common share. Such warrants
are exercisable upon the occurrence of an extraordinary event, as defined
above, and expire in November 2003.

F-28
<PAGE>

Total Sports Inc.
Notes to Consolidated Financial Statements--(Concluded)

NBC Sports Agreement

On November 12, 1999, Total Sports entered into an agreement with NBC Sports,
Inc. for promotion and advertising services. NBC Sports will receive 811,423
shares of Total Sports' common stock in exchange for $17.4 million of on-air
promotion and marketing of all of Total Sports' TotalCasts(TM) over a 51-month
period. The value of the promotion delivered will be calculated at 100% of the
rate charged by NBC Sports for similar promotions during the time period the
promotion is delivered. To the extent that NBC Sports does not meet the sched-
uled amount of promotion during any quarter, NBC Sports will make up such
shortfall the next quarter or by June 30 of the following year. In the event
any shortfall has not been made up, NBC Sports is required to either pay the
amount of shortfall back to Total Sports in cash or return stock (plus any "Ad-
ditional Shares" issued in respect thereof as described below) equal to the
amount of such shortfall calculated using a value of $21.41 per share.

In the event that an initial public offering of Total Sports common stock is
consummated at a price less than $32.11 per share, then Total Sports will issue
additional shares of common stock ("Additional Shares") to NBC Sports in an
amount such that NBC Sports receives stock worth $32.11 for each share origi-
nally issued to them. NBC Sports has also received 811,423 shares of Series E
Convertible Preferred Stock, which provides NBC Sports with a liquidation pref-
erence above common shareholders but subordinate to all other preferred share-
holders in the event of a merger, acquisition or other liquidating event. The
Series E shares are convertible into one share of common stock for every
100,000 shares of Series E stock at the option of NBC Sports at any time, and
automatically convert into common shares upon completion of Total Sports' ini-
tial public offering. The Series E shares are not entitled to dividends and
have voting rights limited to matters that would adversely affect the rights of
the Series E shares.

F-29
<PAGE>

Independent Auditors' Report

To the Board of Directors and Stockholders of
Total Sports Inc.
Raleigh, North Carolina

We have audited the accompanying statement of net assets acquired from KOZ
inc. as of March 31, 1997, and the related statements of operations and cash
flows from the sports content business acquired from KOZ inc. for the eleven
months ended March 31, 1997. These financial statements are the responsibility
of Total Sports Inc.'s management. Our responsibility is to express an opinion
on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting 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 pre-
sentation. We believe that our audit provides a reasonable basis for our opin-
ion.

In our opinion, such financial statements present fairly, in all material re-
spects, the net assets acquired from KOZ inc. as of March 31, 1997, and the
results of operations and cash flows from operations of the sports content
business acquired from KOZ inc. for the eleven months then ended in conformity
with generally accepted accounting principles.

Deloitte & Touche LLP

Raleigh, North Carolina
August 2, 1999

F-30
<PAGE>

Total Sports Inc.
Statement of Net Assets Acquired from KOZ inc.

<TABLE>
<CAPTION>
---------
As of
March 31,
1997
---------
<S> <C>
ASSETS ACQUIRED AND LIABILITIES ASSUMED
Current assets acquired:
Note receivable (Note 3) $ 100,000
Other assets 20,546
<CAPTION>
---------
<S> <C>
Total current assets acquired 120,546
Property and equipment, net (Note 4) 557,172
<CAPTION>
---------
<S> <C>
Total assets acquired 677,718
<CAPTION>
---------
<S> <C>
Current liabilities assumed:
Accounts payable and accrued expenses 175,000
Advances from stockholders (Note 5) 375,000
<CAPTION>
---------
<S> <C>
Total current liabilities assumed 550,000
<CAPTION>
---------
<S> <C>
Net assets acquired $ 127,718
<CAPTION>
=========
</TABLE>

See notes to financial statements.

F-31
<PAGE>

Total Sports Inc.
Statement of Operations
from the Sports Content Business
Acquired from KOZ inc.

<TABLE>
<CAPTION>
-------------
Eleven Months
Ended
March 31,
1997
-------------
<S> <C>
Revenues from operations acquired $ 32,477

Operating expenses from operations acquired:
Salaries and employee benefits 1,145,477
General and administrative 695,738
Marketing and sales 25,738
Depreciation 112,586
<CAPTION>
-------------
<S> <C>
Total operating expenses 1,979,539
<CAPTION>
-------------
<S> <C>
Operating loss from operations acquired $(1,947,062)
<CAPTION>
=============
</TABLE>

See notes to financial statements.

F-32
<PAGE>

Total Sports Inc.
Statement of Cash Flows
from Operations of the Sports Content Business
Acquired from KOZ inc.

<TABLE>
<CAPTION>
-------------
Eleven Months
Ended
March 31,
1997
-------------
<S> <C>
Operating activities:
Operating loss from operations acquired $(1,947,062)
Adjustments:
Depreciation 112,586
Changes in assets and liabilities:
Other assets (20,546)
Accounts payable and accrued expenses 175,000
<CAPTION>
-------------
<S> <C>
Net cash used in operating activities $(1,680,022)
<CAPTION>
=============
</TABLE>

See notes to financial statements.

F-33
<PAGE>

Total Sports Inc.
Notes to Statement of Net Assets
Acquired from KOZ inc. as of March 31, 1997
and Statements of Operations and Cash Flows
from the Sports Content Business
Acquired from KOZ inc.
Eleven Months Ended March 31, 1997

1. Background and Basis of Presentation

Total Sports Inc. (formerly Total Ltd.) was formed on February 20, 1997. On
March 31, 1997, Total Sports purchased certain assets and assumed certain lia-
bilities of the sports and entertainment content business of KOZ inc., a re-
lated company, for an aggregate purchase price of $1,414,240. The assets and
internally developed technology acquired from KOZ formed the nucleus of Total
Sports' ongoing business. As a result, KOZ's sports content business is consid-
ered the predecessor entity of Total Sports.

KOZ commenced operations in January 1996, but did not enter the sports enter-
tainment business until May 1996. Accordingly, the accompanying statements of
operations and cash flows from operations of the sports content business ac-
quired from KOZ have been presented for the eleven-month period ended March 31,
1997.

2. Summary of Significant Accounting Policies

Property and Equipment
Property and equipment is carried at historical cost and is being depreciated
using the straight-line method based on estimated useful lives of three to
seven years.

Fair Value of Financial Instruments
The carrying value of the accounts payable and accrued expenses purchased from
KOZ approximates fair value due to the short-term nature of tax liabilities.
The carrying value of the note receivable approximates fair value because the
interest rate is adjusted monthly to equal the current prime rate.

Revenue Recognition
Revenue from consulting services is recognized as the services are preferred,
provided that no significant obligations remain.

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

3. Note Receivable

Note receivable consists of a $100,000 advance by KOZ to Sports Extra, Inc.,
receivable in 21 monthly principal installments of $4,762 commencing on July 1,
1997, with final payment of all remaining outstanding principal and unpaid in-
terest due on March 31, 1999. The note bore interest at the prime rate (8.5% at
March 31, 1997), adjusted monthly. In connection with Total Sports' subsequent
acquisition of Sports Extra, the $100,000 note receivable was forgiven as par-
tial consideration of the purchase price of Sports Extra.

F-34
<PAGE>

Total Sports Inc.
Notes to Statement of Net Assets
Acquired from KOZ inc. as of March 31, 1997
and Statements of Operations and Cash Flows
from the Sports Content
Business Acquired from KOZ inc.
Eleven Months Ended March 31, 1997--(Concluded)

4. Property and Equipment

Property and equipment acquired from KOZ on March 31, 1997 was as follows:

<TABLE>
<CAPTION>
<S> <C>
Furniture and fixtures $ 17,150
Computer equipment 652,608
---------
669,758
Less accumulated depreciation (112,586)
---------
Property and equipment, net $ 557,172
=========
</TABLE>

5. Advances from Stockholders

These advances are from two stockholders which are due on demand and are nonin-
terest-bearing.

F-35
<PAGE>

Independent Auditors' Report

To the Board of Directors and Shareholders of
Long Distance Technologies, Inc.
Charlotte, North Carolina

We have audited the accompanying balance sheets of Long Distance Technologies,
Inc. as of December 31, 1997 and 1998, and the related statements of opera-
tions, shareholders' equity (deficiency) and cash flows for the years then end-
ed. These financial statements are the responsibility of Long Distance Technol-
ogies' management. Our responsibility is to express an opinion on these finan-
cial statements based on our audits.

In our opinion, such financial statements present fairly, in all material re-
spects, the financial position of Long Distance Technologies, Inc. as of Decem-
ber 31, 1997 and 1998, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted accounting princi-
ples.

Deloitte & Touche LLP

Raleigh, North Carolina
September 8, 1999

F-36
<PAGE>

Long Distance Technologies, Inc.
Balance Sheets

(Unaudited as to June 4, 1999 information)

<TABLE>
<CAPTION>
---------------------------------------
December 31, December 31, June 4,
1997 1998 1999
------------ ------------ -----------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 20,806 $ 154,769 $ 37,764
Accounts receivable 19,668 1,702 11,218
Inventory 23,101 18,982 18,982
Prepaid expenses and other current
assets (Note 3) 53,354 60,411
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total current assets 63,574 228,807 128,375
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Property and equipment, net (Note 4) 81,899 117,950 110,896
Other assets 7,345
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total assets $ 152,818 $ 346,757 $ 239,271
<CAPTION>
============ ============ ===========

<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS'
DEFICIENCY

Current liabilities:
Accounts payable $ 145,756 $ 90,779 $ 258,232
Accrued expenses 15,638 9,676 2,818
Deferred revenues 69,497 44,969
Current maturities of note payable-
related party (Note 5) 20,000 20,000
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total current liabilities 161,394 189,952 326,019
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Note payable-related party (Note 5) 20,000
Series a redeemable preferred stock
(Notes 5 and 12) 800,000 shares
authorized, issued and outstanding at
December 31, 1998 ($1,200,000
aggregate liquidation value at
December 31, 1998) 932,113

Commitments (Notes 8 and 11)

Shareholders' Deficiency (Notes 6, 9
and 12):
Series B convertible preferred stock,
$0.01 par value; 3,000,000 shares
authorized; 1,630,282 issued and
outstanding at December 31, 1998;
($249,433 aggregate liquidation
value at December 31, 1998) 16,303
Common stock, $0.01 par value;
15,000,000 shares authorized;
2,275,000 and 2,837,916 issued and
outstanding at December 31, 1997 and
1998; 9,071,993 issued and
outstanding at June 4, 1999 22,750 28,379 90,720
Additional paid-in capital 1,417,150 1,793,262 2,779,222
Deficit (1,468,476) (2,613,252) (2,956,690)
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total shareholders' deficiency (28,576) (775,308) (86,748)
<CAPTION>
------------ ------------ -----------
<S> <C> <C> <C>
Total liabilities and shareholders'
deficiency $ 152,818 $ 346,757 $ 239,271
<CAPTION>
============ ============ ===========
</TABLE>

See notes to financial statements.

F-37
<PAGE>

Long Distance Technologies, Inc.
Statements of Operations

(Unaudited as to May 31, 1998 and June 4, 1999 information)

<TABLE>
<CAPTION>
----------------------------------------------------
Five-Month Period Ended
Year Ended Year Ended ------------------------
December 31, December 31, May 31, June 4,
1997 1998 1998 1999
------------ ------------ ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 43,175 $ 113,561 $ 27,322 $ 47,216
Cost of revenues (Note
10) 445,443 395,430 137,056 173,502
<CAPTION>
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Gross loss (402,268) (281,869) (109,734) (126,286)
Operating expenses
(Notes 8 and 10) 878,383 863,095 265,227 218,274
<CAPTION>
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Operating loss (1,280,651) (1,144,964) (374,961) (344,560)
Other income (expense):
Interest income 7,741 16,097 9,588 1,122
Interest expense (2,017) (14,395) (13,448)
Gain (loss) on
disposal of property
and equipment 1,418 (1,514) (1,514)
<CAPTION>
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Other income
(expense), net 7,142 188 (5,374) 1,122
<CAPTION>
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net loss $(1,273,509) $(1,144,776) $ (380,335) $ (343,438)
<CAPTION>
============ ============ =========== ===========
</TABLE>

See notes to financial statements.

F-38
<PAGE>

Long Distance Technologies, Inc.
Statements of Shareholders' Equity (Deficiency)

(Unaudited as to June 4, 1999 information)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Series B Convertible Total
Preferred Stock Common Stock Additional Shareholders'
--------------------- --------------------- Paid-in Equity
Shares Amount Shares Amount Capital Deficit (Deficiency)
---------- --------- ---------- --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1997 $ $2,000,000 $ 20,000 $ 925,200 $ (150,267) $ 794,933
Issuance of common stock 105,000 1,050 193,950 195,000
Issuance of common stock
to an officer 140,000 1,400 208,600 210,000
Issuance of common stock
to a director 60,000 600 89,400 90,000
Purchase and retirement
of common stock (30,000) (300) (44,700) (45,000)
Net loss (1,273,509) (1,273,509)
<CAPTION>
---------- --------- ---------- --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1997 2,275,000 22,750 1,417,150 (1,468,476) (28,576)
Issuance of warrants in
connection with note
payable and Series A
Redeemable Preferred
Stock 260,050 260,050
Issuance of Series B
Convertible Preferred
Stock and common stock
pursuant to anti-
dilution provisions of
Series A Redeemable
Preferred Stock, net of
offering costs of
$55,181 1,630,282 16,303 562,916 5,629 172,887 194,819
Accretion of discount on
Series A Redeemable
Preferred Stock (56,825) (56,825)
Net loss (1,144,776) (1,144,776)
---------- --------- ---------- --------- ---------- ----------- ----------
Balance at December 31,
1998 1,630,282 16,303 2,837,916 28,379 1,793,262 (2,613,252) (775,308)
Activity January 1, 1999
through June 4, 1999
(unaudited):
Accretion of discount on
Series A Redeemable
Preferred Stock (27,060) (27,060)
Issuance of Series B
Convertible Preferred
Stock and warrants and
common stock pursuant
to anti-dilution
provisions of Series A
Redeemable Preferred
Stock and Series B
Convertible Preferred
Stock, net of offering
costs of $17,326 652,113 6,521 1,430,615 14,306 61,847 82,674
Conversion of Series A
Redeemable Preferred
Stock to common stock 800,000 8,000 951,173 959,173
Conversion of Series B
Convertible Preferred
Stock to common stock (2,282,395) (22,824) 2,282,395 22,824
Exercise of warrants 1,721,067 17,211 17,211
Net loss (343,438) (343,438)
---------- --------- ---------- --------- ---------- ----------- ----------
Balance at June 4, 1999
(unaudited) -- $ -- $9,071,993 $ 90,720 $2,779,222 $(2,956,690) $ (86,748)
========== ========= ========== ========= ========== =========== ==========
</TABLE>

See notes to financial statements.

F-39
<PAGE>

Long Distance Technologies, Inc.
Statements of Cash Flows

(Unaudited as to May 31, 1998 and June 4, 1999 information)

<TABLE>
<CAPTION>
---------------------------------------------------
Five-Month Period Ended
Year Ended Year Ended -----------------------
December 31, December 31, May 31, June 4,
1997 1998 1998 1999
------------ ------------ ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operating activities:
Net loss $(1,273,509) $(1,144,776) $ (380,335) $ (343,438)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Depreciation and
amortization 10,498 24,974 14,120 9,500
(Gain) loss on disposal
of property and
equipment (1,418) 1,514 1,514
Interest expense related
to warrants issued with
note payable 10,500 10,500
Expense resulting from
common stock issued
below fair value 298,000
Changes in operating
assets and liabilities:
Accounts receivable 108,648 17,966 (9,516)
Inventory (23,101) 4,118 2,784
Prepaid expenses and
other current assets (53,354) (90,509) (7,057)
Other assets (7,345) 7,345
Accounts payable 110,139 (54,977) (93,272) 167,452
Accrued expenses 14,239 (5,962) (5,625) (6,857)
Deferred revenues 69,497 65,672 (24,528)
----------- ----------- --------- ---------
Net cash used in
operating activities (763,849) (1,123,155) (475,151) (214,444)
----------- ----------- --------- ---------
Investing activities:
Purchases of property and
equipment (98,317) (62,539) (57,311) (6,260)
Proceeds from disposal of
property and equipment 14,741 3,814
----------- ----------- --------- ---------
Net cash used in
investing activities (83,576) (62,539) (57,311) (2,446)
----------- ----------- --------- ---------
Financing activities:
Proceeds from issuance of
note payable with
warrants 220,000 220,000
Principal repayments on
note payable (220,000) (220,000)
Proceeds from issuance of
Series A Redeemable
Preferred Stock, net 875,288 875,288
Proceeds from issuance of
warrants in connection
with Series A Redeemable
Preferred Stock 249,550 249,550
Proceeds from issuance of
Series B Convertible
Preferred Stock and
warrants and common
stock, net 194,819 82,674
Proceeds from warrants
exercised 17,211
Proceeds from issuance of
common stock 197,000
Payment for purchase and
retirement of common
stock (45,000)
----------- ----------- --------- ---------
Net cash provided by
financing activities 152,000 1,319,657 1,124,838 99,885
----------- ----------- --------- ---------
Net increase (decrease)
in cash and cash
equivalents (695,425) 133,963 592,376 (117,005)
Cash and cash equivalents,
beginning of period 716,231 20,806 20,806 154,769
----------- ----------- --------- ---------
Cash and cash equivalents,
end of period $ 20,806 $ 154,769 $ 613,182 $ 37,764
=========== =========== ========= =========
Supplemental disclosures of cash flow information:
Cash paid during the
period for interest $ 2,017 $ 3,895 $ 2,948 $ --
<CAPTION>
============ ============ =========== ===========
</TABLE>

Supplemental disclosures of non-cash financing activities:

Year ended December 31, 1998:
During 1998, accretion of discount related to Series A Redeemable Preferred
Stock was $56,825.

Period from January 1, 1999 to June 4, 1999:
During the period ended June 4, 1999, accretion related to Series A Redeemable
Preferred Stock was $27,060.

As also discussed in Note 12, on June 4, 1999, all issued and outstanding Se-
ries A Redeemable Preferred Stock was converted into 800,000 shares of its com-
mon stock, with an aggregate par value of $8,000. The carrying value of the Se-
ries A Redeemable Preferred Stock at the date of conversion was $959,173. The
remaining $951,173 was credited to additional paid-in capital.

As also discussed in Note 12, on June 4, 1999, all issued and outstanding Se-
ries B Convertible Preferred Stock was converted into 2,282,395 shares of its
common stock, with an aggregate par value of $22,824. The carrying value of the
Series B Convertible Preferred Stock at the date of conversion was $22,824.

See notes to financial statements.

F-40
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements

(Unaudited as to May 31, 1998 and June 4, 1999 information)

1. Nature of Operations and Basis of Presentation

Long Distance Technologies, Inc. ("Long Distance") was incorporated on June 3,
1994. Long Distance is a privately held, North Carolina corporation located in
Charlotte, North Carolina and provides an interactive entertainment product
which delivers real-time driver/team audio from the racetrack during National
Association for Stock Car Auto Racing ("NASCAR") Winston Cup racing events via
the internet and telephone.

Long Distance primarily transacts its business within one business segment,
NASCAR Winston Cup racing. Events that have an adverse effect on NASCAR could
have an adverse effect on Long Distance's financial position and operating re-
sults.

Previous to 1997, Long Distance earned commissions from long distance carriers
under resale agreements on the resale of long distance services to business us-
ers. Though no longer a reseller of long distance services, Long Distance con-
tinues to receive commissions, or long distance residuals, from certain carri-
ers based on customer usage. Revenues from long distance residuals totaled ap-
proximately 73.6% and 26.6% of total revenues for the years ended December 31,
1997 and 1998, respectively.

On June 4, 1999, Long Distance was merged with and into Motortrax Acquisition
Corporation, Inc., a wholly-owned subsidiary of Total Sports Inc. Immediately
preceding the merger, all issued and outstanding shares of Series A Redeemable
and Series B Convertible preferred stock and all issued and outstanding war-
rants were converted or exercised, respectively, into Long Distance's common
stock.

Unaudited Financial Statements--The condensed financial statements as of and
for the five months ended May 31, 1998 and as of and for the period from Janu-
ary 1, 1999 to June 4, 1999 are unaudited. In the opinion of management, the
unaudited balance sheet at June 4, 1999, and the unaudited statements of opera-
tions, shareholders' equity (deficiency) and cash flows for the five months
ended May 31, 1998 and the period from January 1, 1999 to June 4, 1999, include
all adjustments, which include only normal recurring adjustments, necessary to
present the financial position and results of operations and cash flows for the
periods then ended in accordance with generally accepted accounting principles.

The results of operations for the period from January 1, 1999 through June 4,
1999 are not necessarily indicative of results to be expected for the full fis-
cal year or any other period.

2. Significant Accounting Policies

Cash and Cash Equivalents
Long Distance considers all highly liquid temporary cash investments with an
original maturity of ninety days or less to be cash equivalents.

Concentration of Credit Risk
Long Distance relies on a single vendor for maintaining an Internet web site
through which subscribers purchase and access the audio product. This vendor
also collects all subscription proceeds and remits these monies, less its fees
periodically, based on the frequency of NASCAR races.

Inventory
Long Distance's inventory at December 31, 1997 and 1998 consists primarily of
prepaid calling card supplies. Inventory is priced at the lower of cost or mar-
ket with cost being determined on a first-in, first-out method.

Advances on Driver Royalties
Long Distance has executed participation agreements with certain NASCAR driv-
ers. The agreements provide Long Distance with the right to receive and
retransmit the driver/team's two-way radio conversations. Royalties are earned
pursuant to a royalty pool arrangement based upon a percentage of gross pro-
ceeds as defined in the drivers' license agreement.

F-41
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements--(Continued)

Advances on minimum royalties, which are nonrefundable, are initially reflected
as prepaid expenses. Expense is recognized on a per race aggregate basis based
on the greater of amounts earned pursuant to the royalty pool arrangement or on
a straight-line basis over a 32-race NASCAR season.

Property and Equipment
Property and equipment is carried at historical cost and is being depreciated
and amortized using the straight-line method over the estimated useful lives of
the related assets, which is generally five years.

Income Taxes
The tax effect of losses for the years ended December 31, 1997 and 1998 are re-
corded under the provisions of Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes ("SFAS 109"). Under SFAS 109, deferred income
taxes are recognized for the tax consequences of "temporary" differences by ap-
plying enacted statutory tax rates applicable to future years to differences
between the financial statement carrying amounts and the tax bases of existing
assets and liabilities. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.

Revenue Recognition
Revenue from Internet sales is recognized upon the completion of each NASCAR
race.

Revenue and related expenses from the sale of promotional prepaid calling cards
is recognized over the committed performance period on a per race basis.

Revenue from long distance residuals is recognized as long distance services
are used.

Cost of Revenues
Cost of revenues consists primarily of license fees paid to drivers, fees paid
for processing, and transmitting two-way radio transmissions to the Internet
web site related to Long Distance's interactive entertainment product.

Advertising
Long Distance expenses advertising costs as incurred. Advertising expense was
approximately $100,000 and $151,000 for 1997 and 1998, respectively.

Research and Development Costs
Research and development costs are expensed as incurred. Such costs were ap-
proximately $35,600 and $76,200, for 1997 and 1998, respectively.

Stock Compensation
Long Distance's stock option plan is accounted for in accordance with Account-
ing Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to
Employees. Long Distance follows the disclosure requirements of Statement of
Financial Accounting Standards No. 123, Accounting for Stock Based Compensa-
tion.

Warrants
Stock purchase warrants issued in connection with debt instruments are recorded
at their estimated fair value and credited to additional paid-in capital. Any
resulting debt discount is amortized to interest expense over the term of the
related debt.

Stock purchase warrants issued in connection with equity issuances are recorded
at their estimated fair value and credited to additional paid-in capital.

F-42
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements--(Continued)

Fair Value of Financial Instruments
Long Distance's financial instruments consist of cash and cash equivalents,
trade receivables, trade payables and a note payable from a related party. The
carrying value of the note payable approximates fair value because the interest
rate is not significantly different from the current market rate. The carrying
values of the remaining instruments approximate fair value because of the
short-term nature of these assets and liabilities.

Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of Fi-
nancial Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities. This statement establishes accounting and reporting stan-
dards for derivative instruments, including certain derivative instruments em-
bedded in other contracts (collectively referred to as derivatives) and for
hedging activities. It requires that an entity recognize all derivatives as ei-
ther assets or liabilities in the statement of financial position and measure
those instruments at fair value. Long Distance will be required to adopt the
new reporting guidelines for the fiscal year beginning January 1, 2001. Long
Distance has not fully analyzed the provisions of this statement or its effects
on its financial statements.

Reclassifications
Certain 1997 balances have been reclassified to conform with 1998 presentation.

3. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are comprised of the following:

<TABLE>
<CAPTION>
-----------------------
December 31, June 4,
1998 1999
------------ ---------
<S> <C> <C>
Prepaid Promotional Card expense $ 41,812 $ 27,054
Prepaid Driver's Royalties -- 29,063
Security Deposits 4,494 4,294
Other prepaid expenses 7,048 --
--------- ---------
$ 53,354 $ 60,411
========= =========
</TABLE>

4. Property and Equipment

Property and equipment at December 31, 1997 and 1998 are summarized as follows:

<TABLE>
<CAPTION>
---------------------
1997 1998
--------- ---------
<S> <C> <C>
Fixtures and furniture $ 17,362 $ 16,736
Computer equipment and software 77,186 138,458
--------- ---------
Total 94,548 155,194
Less accumulated depreciation and amortization (12,649) (37,244)
--------- ---------
Property and equipment, net $ 81,899 $ 117,950
========= =========
</TABLE>

F-43
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements--(Continued)

5. Notes Payable

At December 31, 1998 and 1997, the note payable to a related party totaled
$20,000 and was payable to an officer of Long Distance. The note has an inter-
est rate of 16 percent and is due with accrued interest on December 31, 1999.

In January 1998, Long Distance issued a promissory note in the amount of
$220,000 with detachable warrants to purchase 30,000 shares of Long Distance's
common stock. The note carried an interest rate of 12 percent. The effective
interest rate was 60.261 percent. The note was repaid with proceeds from the
Series A Redeemable convertible preferred stock offering executed in February
1998 (see Note 6). The warrants were exercised on June 4, 1999 at a price per
share of $0.01 (see Note 12).

6. Preferred Stock

Series A Redeemable Convertible Preferred Stock
In February 1998, Long Distance raised proceeds (net of offering costs of
$75,162) of $1,124,838 from the issuance of 800,000 shares of Series A Redeem-
able Convertible preferred stock ("Series A Preferred") and warrants to pur-
chase 713,000 shares of common stock at $0.01 per share to a venture capital
fund (the "Series A Offering"). The warrants were exercisable immediately and
would have expired in February 2008. Both the Series A Preferred and the war-
rants were subject to anti-dilution protection. The holders of Series A Pre-
ferred were entitled to vote the number of preferred shares outstanding on the
same basis as holders of Long Distance's common stock.

The holders of Series A Preferred were entitled to receive preferential divi-
dends in cash, when, as and if declared by Long Distance. No dividends were de-
clared or paid during 1997 or 1998.

The Series A Preferred was automatically converted into Long Distances' common
stock on June 4, 1999, on a 1:1 basis (see Note 12). The warrants were exer-
cised at a price per share of $.01 on June 4, 1999 (see Note 12).

The carrying value of the Series A Redeemable, which reflected an original dis-
count of $324,712 related to the warrants and issuance costs, was increased by
periodic accretions so that the carrying value would equal the mandatory re-
demption value of $1.50 per share on the earliest mandatory redemption date of
February 2003. During 1998, such accretion totaled $56,825.

Series B Convertible Preferred Stock
In December 1998, Long Distance raised proceeds (net of offering costs of
$55,181) of $194,819 from the issuance of 1,630,282 shares of Series B Convert-
ible preferred stock ("Series B Preferred") to a venture capital fund. The Se-
ries B Preferred was subject to anti-dilution protection. The holders of Series
B Preferred were entitled to vote the number of preferred shares outstanding on
the same basis as the holders of Long Distance's common stock.

The holders of Series B Preferred were entitled to receive preferential divi-
dends in cash, when, as and if declared by Long Distance, only after dividends
declared relating to Series A Preferred have been paid. No dividends were de-
clared or paid during 1997 or 1998.

The issuance of Series B Preferred triggered the anti-dilution provisions of
the Series A Offering. Under such provisions, 562,916 shares of common stock
and warrants to purchase 501,886 shares of common stock were issued to the
holders of the Series A Preferred during 1998. Common stock and additional
paid-in capital were increased by $5,629 and $228,068, respectively.

In March 1999, Long Distance raised proceeds of $82,674 (net of offering costs
of $17,326) through the issuance of 652,113 shares of Series B Convertible pre-
ferred stock and 256,087 shares of common stock to a venture capital fund.

The issuance of Series B Preferred in March 1999 triggered the anti-dilution
provisions of the Series A Offering and the initial Series B Offering. Under
such provisions, 534,312 shares of common stock and warrants to purchase
476,181 shares of common stock were issued to the holders of the Series A Pre-
ferred and 640,216 shares of common stock were issued to the holders of the Se-
ries B Preferred during 1999.

F-44
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements--(Continued)

Common stock and additional paid-in capital were increased by $14,306 and
$79,173, respectively, related to the anti-dilution provisions.

The Series B Preferred was automatically converted into Long Distances' common
stock on June 4, 1999 on a 1:1 basis (see Note 12).

7. Income Taxes

The components of Long Distance's net deferred tax asset as of December 31,
1997 and 1998, and June 4, 1999, were as follows:

<TABLE>
<CAPTION>
-----------------------------------
1997 1998 1999
--------- --------- -----------
(Unaudited)
<S> <C> <C> <C>
Non-current deferred tax assets
(liabilities):
Net operating loss carryforwards $ 429,800 $ 867,900 $ 1,008,100
Promotional expenses (16,200) (10,500)
Deferred revenues 27,000 17,500
Fixed assets 7,300 1,200 (2,300)
--------- --------- -----------
Total deferred tax assets 437,100 879,900 1,012,800
Valuation allowances (437,100) (879,900) (1,012,800)
--------- --------- -----------
Net deferred tax assets $ -- $ -- $ --
========= ========= ===========
</TABLE>

Based on management's evaluation of the positive and negative evidence im-
pacting the realizability of the deferred tax assets, a full valuation allow-
ance has been provided. Management considered Long Distance's history of losses
and concluded that as of December 31, 1997 and 1998, the deferred tax assets
should be fully reserved.

For the periods ended December 31, 1997 and 1998, reported income taxes dif-
fered from income tax benefit that would result from applying the federal stat-
utory rate of 34% to pretax loss due to the following:

<TABLE>
<CAPTION>
---------------------
1997 1998
--------- ---------
<S> <C> <C>
Federal income tax benefit $(433,000) $(389,200)
State tax benefit, net of federal income tax
benefit (61,000) (54,800)
Contract marketing expenses 34,680
Compensation expense 80,900 --
Meals and entertainment 750 700
Officers' life insurance 470 600
Change in valuation allowance 377,200 442,700
--------- ---------
Tax benefit $ -- $ --
========= =========
</TABLE>

At December 31, 1998, Long Distance had federal and state operating loss
carryforwards totaling approximately $2.2 million that could be offset against
future federal and state taxable income. Such loss carryforwards expire in 2016
(federal) and 2001 (state). Under the Tax Reform Act of 1986, the amounts of
and benefits from net operating losses carried forward might be impaired or
limited in certain circumstances. Long Distance will be limited in the amount
of net operating losses that may be utilized in any one year due to a cumula-
tive change in ownership of more than 50% over a three-year period. At December
31, 1997 and 1998, the effect of such limitations, if imposed, is not expected
to be significant.

F-45
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements--(Continued)

8. Lease Commitments

During 1997 and 1998, Long Distance leased office space and certain equipment
under various operating leases. Rental expense charged to operations for all
operating leases totaled approximately $34,000 and $74,000 for the years ended
December 31, 1997 and 1998, respectively. As of December 31, 1998, future mini-
mum lease commitments on leases that have initial or remaining non-cancelable
lease terms of one year or longer were as follows:

<TABLE>
<S> <C>
1999 $ 52,830
2000 46,286
2001 24,642
---------
Total minimum lease payments $ 123,758
=========
</TABLE>

9. Stock Options and Warrants

Stock Options
During 1998, Long Distance implemented a stock option plan (the "Plan") pursu-
ant to which employees and directors of Long Distance, as well as selected con-
sultants, will be granted stock options to acquire up to a maximum of 60,000
shares of Long Distance's common stock. The term of the Plan is until January
20, 2008. Option exercise prices are no less than 85% of the fair market value
of the common stock at the date of grant. Vested options may be exercised for a
period of up to ten years from the date of grant.

In March 1998, Long Distance granted an option to purchase 10,000 shares of
Long Distance's common stock to a driver's agent pursuant to the Plan. The op-
tion price is $2.00 per share. The option vests as follows: (i) 5,000 shares
were exercisable and vested immediately upon grant; and (ii) 5,000 became exer-
cisable on March 15, 1999. No compensation expense was recorded because the
fair value of the option was considered to be insignificant at the date of
grant.

Common Stock Warrants
During 1998 Long Distance issued warrants to purchase a total of 1,244,886
shares of common stock to holders of the Series A Preferred and to the holder
of the promissory note payable (see Notes 5 and 6). All warrants are immedi-
ately exercisable at a price per share of $0.01 up to ten years from the date
of closing of the respective financings. No warrants were exercised during
1998.

10. Related Party Transactions

In connection with common stock issued to an officer and a director of Long
Distance, compensation expense and marketing expense, respectively of $208,600
and $89,400, respectively, was recognized during 1997.

Long Distance paid approximately $58,000 and $103,000 in marketing expenses in
1997 and 1998, respectively, to a firm whose president is a director and share-
holder of Long Distance.

Long Distance paid approximately $27,000 and $20,000 in 1997 and 1998, respec-
tively, for logistics services provided by a shareholder of Long Distance.

Long Distance paid approximately $48,000 and $46,000 in legal expenses for 1997
and 1998, respectively, to a law firm of a director and shareholder of Long
Distance.

Long Distance paid approximately $56,000 in 1997, for commentator expenses to
shareholders of Long Distance.

F-46
<PAGE>

Long Distance Technologies, Inc.
Notes to Financial Statements--(Concluded)

11. Commitments

In May 1998, Long Distance entered into a licensing agreement with NASCAR,
which was subsequently amended in March 1999. The license fee for 1998 was
$40,000. Under such agreement, as amended, Long Distance has guaranteed a mini-
mum of $35,000 and $50,000 in licensing royalties to NASCAR in 1999 and 2000,
respectively.

12. Subsequent Events

On June 4, 1999, Long Distance was merged with and into Motortrax Acquisition
Corporation, Inc. The name of the surviving merged corporation was changed to
Total Motorsports, Inc. Immediately preceding the merger, all issued and out-
standing Series A Redeemable and Series B Convertible preferred stock was con-
verted on a 1:1 basis (see Note 6) into common stock. In addition, all issued
and outstanding warrants to purchase common stock were exercised at the stated
price per share ($0.01). Immediately prior to the merger, warrants to purchase
1,721,067 shares of Long Distance common stock had been granted and outstand-
ing. Proceeds from the exercise of warrants amounted to $17,211. As a result of
the conversion and exercise, 4,803,462 shares of common stock of Long Distance
were issued. The resulting issued and outstanding common stock of Long Dis-
tance, representing 9,071,993 shares, was then exchanged for 284,401 shares of
Total Sports, Inc. common stock in a transaction valued at approximately $3.2
million. The conversion and exercise of all previously issued and outstanding
Series A Redeemable and Series B Convertible preferred stock and warrants has
been reflected in the accompanying unaudited interim condensed financial state-
ments at June 4, 1999.

In August 1999, Total Motorsports, Inc. entered into a sales agreement with a
third-party to sell certain prepaid calling cards. The contractual revenues un-
der this agreement are approximately $441,000. The committed term of the agree-
ment is through June 30, 2000.

F-47
<PAGE>

Unaudited Pro Forma Financial Data

The following unaudited pro forma consolidated financial data have been derived
by the application of pro forma adjustments to the historical financial state-
ments of Total Sports Inc. for the periods indicated. The adjustments are de-
scribed in the accompanying notes. The unaudited pro forma financial data give
effect solely to our June 4, 1999 acquisition of Long Distance Technologies,
Inc., which was financed by the issuance of 284,401 shares of our common stock
valued at $3,227,951. The acquisition has been accounted for under the purchase
method of accounting and is included in our unaudited balance sheet as of June
30, 1999. The unaudited pro forma statement of operations data for the six
months ended June 30, 1999 and the year ended December 31, 1998 give effect to
the Long Distance Technologies acquisition as if it occurred on January 1,
1998.

The unaudited pro forma financial data are provided for informational purposes
only and do not represent our results of operations or financial position had
the Long Distance Technologies acquisition occurred on January 1, 1998, nor are
they indicative of our results of operations or financial position as of any
future date or period. The unaudited pro forma financial data and accompanying
notes should be read in conjunction with the consolidated financial statements
and accompanying notes thereto and the other financial information included
elsewhere in this prospectus.

F-48
<PAGE>

Unaudited Pro Forma Statement of Operations Data
Year Ended December 31, 1998

------------------------------------------------------
<TABLE>
<CAPTION>
Historical Historical
------------ -------------
Year ended
Year Ended December 31,
December 31, 1998
1998 Long Distance Acquisition Total
Total Sports Technologies Subtotal Adjustments Pro Forma
------------ ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Digital publishing $ 2,082,979 $ 113,561 $ 2,196,540 $ 2,196,540
Print publishing 1,314,692 1,314,692 1,314,692
E-commerce 435,172 435,172 435,172
------------ ----------- ------------ ----------- ------------
Total revenues 3,832,843 113,561 3,946,404 -- 3,946,404
------------ ----------- ------------ ----------- ------------
Cost of Revenues:
Digital publishing 3,566,676 395,430 3,962,106 3,962,106
Print publishing 2,375,249 2,375,249 2,375,249
E-commerce 331,720 331,720 331,720
------------ ----------- ------------ ----------- ------------
Total cost of revenues 6,273,645 395,430 6,669,075 -- 6,669,075
------------ ----------- ------------ ----------- ------------
Gross profit (loss) (2,440,802) (281,869) (2,722,671) (2,722,671)
------------ ----------- ------------ ----------- ------------
Operating Expenses:
Product development 2,671,969 76,173 2,748,142 2,748,142
Sales and marketing 2,743,899 255,122 2,999,021 2,999,021
General and
administrative 2,598,602 531,800 3,130,402 5,000 (a) 3,135,402
Amortization 185,485 185,485 2,161,000 (b) 2,346,485
------------ ----------- ------------ ----------- ------------
Total operating
expenses 8,199,955 863,095 9,063,050 2,166,000 11,229,050
------------ ----------- ------------ ----------- ------------
Operating loss (10,640,757) (1,144,964) (11,785,721) (2,166,000) (13,951,721)
------------ ----------- ------------ ----------- ------------
Other income (expense), net (522,916) (188) (522,728) (522,728)
------------ ----------- ------------ ----------- ------------
Net loss (11,163,673) (1,144,776) (12,308,449) (2,166,000) (14,474,449)
Dividends on
preferred stock (197,645) (197,645) (197,645)
------------ ----------- ------------ ----------- ------------
Net loss applicable to
common shareholders $(11,361,318) $(1,144,776) $(12,506,094) $(1,128,000) $(14,672,094)
============ =========== ============ =========== ============
Loss Per Share (c):
Basic and diluted $ (7.28) $ (9.40)
============ ============
Weighted Average Number
of Shares Outstanding (c):
Basic and diluted 1,560,903 1,560,903
============ ============
</TABLE>

See Notes to Unaudited Pro Forma Statement of Operations Data.

F-49
<PAGE>

Unaudited Pro Forma Statement of Operations Data
Six Months Ended June 30, 1999

---------------------------------------------------
<TABLE>
<CAPTION>
Historical Historical
------------- -------------
Five Months
Six Months Ended
Ended May 31, 1999
June 30, 1999 Long Distance Acquisition Total
Total Sports Technologies Subtotal Adjustments Pro Forma
------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Digital publishing $ 2,935,480 $ 47,216 $ 2,982,696 $ 2,982,696
Print publishing 1,040,563 1,040,563 1,040,563
E-commerce 701,111 701,111 701,111
----------- --------- ----------- ---------- -----------
Total revenues 4,677,154 47,216 4,724,370 -- 4,724,370
----------- --------- ----------- ---------- -----------
Cost of Revenues:
Digital publishing 3,786,200 173,502 3,959,702 3,959,702
Print publishing 1,468,002 1,468,002 1,468,002
E-commerce 543,291 543,291 543,291
----------- --------- ----------- ---------- -----------
Total cost of
revenues 5,797,493 173,502 5,970,995 -- 5,970,995
----------- --------- ----------- ---------- -----------
Gross profit (loss) (1,120,339) (126,286) (1,246,625) (1,246,625)
Operating Expenses:
Product development 1,999,317 20,312 2,019,629 2,019,629
Sales and marketing 1,654,244 44,225 1,698,469 1,698,469
General and
administrative 1,680,189 153,737 1,833,926 2,500 (a) 1,836,426
Amortization 321,682 321,682 1,080,000 (b) 1,401,682
----------- --------- ----------- ---------- -----------
Total operating
expenses 5,655,432 218,274 5,873,706 1,082,500 6,956,206
----------- --------- ----------- ---------- -----------
Operating loss (6,775,771) (344,560) (7,120,331) (1,082,500) (8,202,831)
----------- --------- ----------- ---------- -----------
Other income
(expense), net (139,591) 1,122 (138,469) (138,469)
----------- --------- ----------- ---------- -----------
Net loss (6,915,362) (343,438) (7,258,800) (1,082,500) (8,341,300)
Dividends on
preferred stock (96,965) (96,965) (96,965)
----------- --------- ----------- ---------- -----------
Net loss applicable
to common
shareholders $(7,012,327) (343,438) (7,355,765) (1,082,500) $(8,438,265)
=========== ========= =========== ========== ===========
Loss Per Share (c):
Basic and diluted $ (3.96) $ (4.76)
=========== ===========
Weighted Average
Number of Shares
Outstanding (c):
Basic and diluted 1,770,917 1,770,917
=========== ===========
</TABLE>

See Notes to Unaudited Pro Forma Statement of Operations Data.

F-50
<PAGE>

Notes to Unaudited Pro Forma Statement of Operations Data

(a) Reflects additional depreciation expense in connection with the Long Dis-
tance Technologies acquisition.

(b) The Long Distance Technologies acquisition has been accounted for using the
purchase method of accounting. The purchase price allocation for the Long Dis-
tance Technologies acquisition has not been finalized and is based on available
information, internal estimates and assumptions we believe are reasonable. The
purchase price will be allocated to the tangible and intangible assets acquired
and liabilities assumed based upon their respective fair values at the time the
acquisition was consummated, pending completion of appraisals of property and
equipment acquired. The excess of the purchase price over the historical basis
of the net assets acquired has been allocated to goodwill based on preliminary
estimates. The actual allocation of the purchase cost, however, and the result-
ing effect on income from operations may differ significantly from the pro
forma amounts included herein pending the completion of appraisals and other
purchase price adjustments.

Preliminary goodwill of $3,421,000 resulting from the Long Distance Technolo-
gies acquisition will be amortized over a period of 19 months, which coincides
with the remaining term of Long Distance Technologies' contract for NASCAR
broadcasting rights as of June 4, 1999, the date of acquisition.

The 284,401 shares of Total Sports' common stock issued as consideration in the
Long Distance Technologies acquisition are being held in escrow until any and
all indemnification claims or disputed claims notices have been satisfied. One-
third of the shares held in escrow, less a portion to be forfeited to satisfy
any indemnification claims, are due to be released on June 4, 2000, subject to
the occurrence of a significant event. The escrow agreement defines a signifi-
cant event as the effectiveness of a registration statement for the sale of the
shares held in escrow in a underwritten public offering registered under the
Securities Act of 1933, or the consummation of a transaction or series of
events that result in the escrowed shares becoming publicly traded. If such a
significant event occurs before June 4, 2000, then at that date escrowed shares
with a value in excess of $4.0 million shall be released from escrow, less any
portion subject to a disputed claims notice. Upon the occurrence of a signifi-
cant event after June 4, 2000, an additional amount of escrowed shares then in
excess of $4.0 million shall be released, less any portion subject to a dis-
puted claims notice. The remainder of the escrowed shares shall be released De-
cember 4, 2000, to the extent the escrowed shares are not required to be for-
feited in satisfaction of indemnification claims or disputed claims notices.

(c) Basic and diluted weighted average shares outstanding for the six months
ended June 30, 1999 and for the year ended December 31, 1998 exclude 284,401
shares to arrive at pro forma weighted average shares outstanding as if the is-
suance of 284,401 shares of our common stock issued in consideration for the
Long Distance Technologies acquisition as these shares are currently held in
escrow and the final number of shares to be issued is contingent upon the sat-
isfaction of any indemnification claims or disputed claims notices.

F-51
<PAGE>

[LOGO OF TOTAL SPORTS](TM)

<PAGE>

Part II
Information Not Required in Prospectus

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than the under-
writing discount, payable by the registrant in connection with the sale of com-
mon stock being registered. All amounts are estimates except the SEC registra-
tion fee, the NASD filing fee and the Nasdaq National Market listing fee.

<TABLE>
<CAPTION>
--------
<S> <C>
SEC Registration Fees................................................. $ 15,985
NASD Fees.............................................................
Nasdaq National Market Listing Fees...................................
Printing and Engraving Expenses.......................................
Legal Fees and Expenses...............................................
Accounting Fees and Expenses..........................................
Blue Sky Fees and Expenses............................................
Transfer Agent Fees...................................................
Miscellaneous and Registrant's Costs..................................
--------
Total............................................................... $
========
</TABLE>

Item 14. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law (the "DGCL") provides, in
effect, that any person made a party to any action by reason of the fact that
he is or was a director, officer, employee or agent of Total Sports may and, in
certain cases, must be indemnified by Total Sports against, in the case of a
non-derivative action, judgments, fines, amounts paid in settlement and reason-
able expenses (including attorneys' fees) incurred by him as a result of such
action, and in the case of a derivative action, against expenses (including at-
torneys' fees), if in either type of action he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
Total Sports. This indemnification does not apply, in a derivative action, to
matters as to which it is adjudged that the director, officer, employee or
agent is liable to Total Sports, unless upon court order it is determined that,
despite such adjudication of liability, but in view of all the circumstances of
the case, he is fairly and reasonably entitled to indemnity for expenses, and,
in a non-derivative action, to any criminal proceeding in which such person had
reasonable cause to believe his conduct was unlawful.

Total Sports' certificate of incorporation, as amended, provides that no direc-
tor of Total Sports shall be liable to Total Sports or its stockholders for
monetary damages for breach of fiduciary duty as a director to the fullest ex-
tent permitted by the DGCL.

Total Sports' certificate of incorporation, as amended, also provides that To-
tal Sports shall indemnify to the fullest extent permitted by Delaware law any
and all of its directors and officers, or former directors and officers, or any
person who may have served at Total Sports' request as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise.

Reference is made to Section 7 of the underwriting agreement to be filed as Ex-
hibit 1.1 hereto, pursuant to which the Underwriters have agreed to indemnify
officers and directors of Total Sports against certain liabilities under the
Securities Act.

Total Sports has entered into Indemnification Agreements with each director of
Total Sports with each director of Total Sports, a form of which is filed an
Exhibit to this Registration Statement. Pursuant to such agreements, Total
Sports will be obligated, to the extent permitted by applicable law, to indem-
nify such directors against all expenses, judgments, fines and penalties in-
curred in connection with the defense or settlement of any actions

II-1
<PAGE>

brought against them by reason of the fact that they were directors of Total
Sports or assumed certain responsibilities at the director of Total Sports.
Total Sports also intends to purchase directors and officers liability for in-
demnification of directors and officers.

Item 15. Recent Sales of Unregistered Securities.

In connection with the formation of Total Ltd., the predecessor of Total
Sports, Total Ltd. issued an aggregate of 961,291 shares of its common stock
to eleven individuals for an aggregate consideration of $961.30. These shares
were issued by Total Ltd. in reliance on the exemption from registration under
Section 4(2) of the Securities Act.

In March 1997, Total Ltd. issued 290,323 shares of its common stock in ex-
change for the outstanding common stock of Sports Extra, Inc., a Connecticut
corporation, pursuant to an agreement of merger and plan of reorganization.
These shares of common stock were issued in reliance on the exemption from
registration under Section 4(2) of the Securities Act.

In May 1997, Total Ltd. issued stock purchase warrants to Frank A. Daniels
III, and Frank A. Daniels, Jr. exercisable for an aggregate of 16,200 shares
of common stock of Total Ltd., at an exercise price of $3.42 per share. These
warrants terminate on the earliest to occur of May 15, 2007, an acquisition of
the Registrant or the closing of the Registrant's initial public offering.
These warrants were issued by Total Ltd. in reliance on the exemption from
registration under Section 4(2) of the Securities Act.

Pursuant to an investment agreement dated as of June 2, 1997, Piedmont Venture
Partners Limited Partnership and Mr. Daniels, Jr. purchased, for an aggregate
purchase price of $1,250,000, an aggregate of 125,000 shares of Total Ltd.'s
Series A preferred stock and warrants exercisable for 365,218 shares of its
common stock, at an exercise price of $0.01 per share. These shares of Series
A preferred stock and the warrants were issued by Total Ltd. in reliance on
the exemptions from registration under the Securities Act provided by Regula-
tion D thereunder.

In June 1997, Total Ltd. issued a stock purchase warrant to Carolina Financial
Securities, LLC exercisable for 6,598 shares of common stock of Total Ltd. at
an exercise price of $3.44 per share. This warrant terminates on the earliest
to occur of June 2, 2002, the acquisition of the Registrant, or the closing of
the Registrant's initial public offering. This issuance was made by Total Ltd.
in reliance upon the exemption from registration under Section 4(2) of the Se-
curities Act.

Pursuant to a Series B investment agreement, dated as of November 4, 1997,
Nurray Telluride Properties Limited Partnership, Piedmont Venture Partners,
Mr. Daniels, Jr., Mr. Daniels, III and Julie Nowell purchased an aggregate of
445,263 shares of Series B preferred stock of Total Ltd. for an aggregate pur-
chase price of approximately $2,000,000. The shares of Series B preferred
stock were issued by Total Ltd. in reliance upon the exemptions from registra-
tion under the Securities Act provided by regulation D thereunder.

In November 1997, Total Ltd. issued stock purchase warrants to Carolina Finan-
cial Securities and 4 of its then current principals exercisable for an aggre-
gate of 8,285 shares of common stock of Total Ltd. at an exercise price of
$4.94 per share. These warrants terminate on the earliest to occur of the date
5 years from the date of issuance, the acquisition of the Registrant, or the
closing of the Registrant's initial public offering. These issuances were made
by Total Ltd. in each case, in reliance upon the exemption from registration
under Section 4(2) of the Securities Act.

Pursuant to an asset purchase agreement and plan of reorganization dated as of
December 22, 1997, Total Ltd. issued an aggregate of 33,142 shares of its com-
mon stock to three individuals in exchange for the assets of Designet, Inc., a
North Carolina corporation. These shares of common stock were issued by Total
Ltd. in reliance on the exemption from registration under Section 4(2) of the
Securities Act.

Pursuant to note and warrant purchase agreements dated January 14, 1998, March
2, 1998 and April 7, 1998 Total Ltd. issued an aggregate of $2,500,000 of 10%
convertible promissory notes and issued stock purchase

II-2
<PAGE>

warrants exercisable for an aggregate of 83,482 shares of Series B preferred
stock, at an exercise price of $4.492 per share, each expiring on January 31,
2008. On June 16, 1998, the warrants were amended to become exercisable for an
aggregate 50,805 shares of Series B preferred stock at an exercise price of
$4.492 per share. These notes and warrants were sold for an aggregate consid-
eration of $2,500,000 to two institutional investors, Piedmont Venture Part-
ners and Nuray Telluride Properties, and one individual investor, Mr. Daniels,
III. These issuances were made by Total Ltd., in each case, in reliance upon
the exemptions from registration under Section 4(2) of the Securities Act.

On January 20, 1998, Total Ltd. issued a stock purchase warrant to Mr. Dan-
iels, III exercisable for 7,268 shares of common stock of the Registrant at an
exercise price of $4.492 per share, dated effective September 4, 1997. This
warrant terminates on the earliest to occur of September 4, 2002, the acquisi-
tion of the Registrant, or the closing of the Registrant's initial public of-
fering. This warrant was issued by Total Ltd. on reliance of the exemption
from registration under Section 4(2) of the Securities Act.

In June 1998, pursuant to a reorganization and plan of merger, each outstand-
ing share of Total Ltd.'s common stock was converted into one share of Regis-
trant's common stock, each outstanding share of Total Ltd.'s Series A pre-
ferred stock was converted into one share of Registrant's Series A redeemable
preferred stock, each outstanding share of Total Ltd.'s Series B preferred
stock was converted into one share of Registrant's Series B preferred stock,
each outstanding option to purchase shares of Total Ltd.'s common stock auto-
matically converted into an option to purchase the same number of shares of
Registrant's common stock and each outstanding warrant to purchase shares of
Total Ltd.'s common stock or Series B preferred stock automatically converted
into a warrant exercisable for the same number of shares of Registrant's com-
mon stock or Series B preferred stock. These issuances were made in reliance
upon the exemptions from registration under Section 4(2) of the Securities
Act.

Pursuant to a subscription agreement dated as of June 2, 1998, the Registrant
issued 837,942 shares of its common stock to Total College Communications Com-
pany, L.L.C. which distributed such shares of common stock to its members, To-
tal Ltd. and Host Communications, Inc. These shares of common stock were is-
sued in reliance upon the exemptions from registration under Section 4(2) of
the Securities Act.

Pursuant to a note and warrant purchase agreement, dated as of June 16, 1998,
the Registrant sold to Piedmont Venture Partners and one unaffiliated individ-
ual investor an aggregate of $1,100,000 10% convertible promissory notes and
stock purchase warrants exercisable for an aggregate of 22,773 shares of Se-
ries B preferred stock at an exercise price of $4.492 per share, expiring on
June 30, 2008. The issuance of these notes and warrants were made by the Reg-
istrant, in each case, in reliance upon the exemptions from registration under
Section 4(2) of the Securities Act.

Pursuant to a Series C investment agreement, dated as of August 6, 1998, twen-
ty-three individual and six institutional investors purchased an aggregate of
1,418,200 shares of Series C preferred stock for an aggregate purchase price
of $10,077,729.20 which included approximately $3,726,885 for the cancellation
of 10% convertible promissory notes. In addition, four of those investors, in-
cluding WinStar Interactive Ventures I, Inc., Piedmont Venture Partners, Nuray
Telluride Properties and Mr. Daniels, III also received an option to purchase
an aggregate of up to 632,244 shares of Series C1 preferred stock, for an ag-
gregate purchase price of up to $5,999,995.59. These shares of Series C pre-
ferred stock were issued in reliance on the exemptions from registration under
the Securities Act provided by Regulation D thereunder.

In August 1998, the Registrant issued stock purchase warrants to Carolina Fi-
nancial Securities and 5 of its then current principals exercisable for an ag-
gregate of 31,458 shares of common stock of the Registrant at an exercise
price of $7.82 per share. These warrants terminate on the earliest to occur of
the date 5 years from the date of issuance, the acquisition of the Registrant,
or the closing of the Registrant's initial public offering. These issuances
were made by the Registrant, in each case, in reliance upon the exemption from
registration under Section 4(2) of the Securities Act.

II-3
<PAGE>

The Registrant issued a stock purchase warrant dated as of August 7, 1998, to
an individual exercisable for 20,000 shares of the common stock of the Regis-
trant at an exercise price of $7.106 per share. This warrant terminates on the
earliest to occur of August 7, 2003, the acquisition of the Registrant, or the
closing of the Registrant's initial public offering. This warrant was issued by
the Registrant upon reliance upon the exemption from registration under Section
4(2) of the Securities Act.

Pursuant to a subscription agreement dated September 15, 1998, the Registrant
issued 37,100 shares of its common stock to Mr. Daniels, III in exchange for
his personal guaranty of the Registrant's line of credit with First Union Na-
tional Bank. These shares of common stock were issued by the Registrant in re-
liance upon the exemption from registration under Section 4(2) of the Securi-
ties Act.

Pursuant to a subscription agreement approved by the board of directors on Au-
gust 6, 1998, the Registrant issued to a director 14,073 shares of its common
stock valued at $1.25 per share in exchange for services provided and to be
provided. These shares of common stock were issued by the Registrant in reli-
ance on the exemption from registration under Section 4(2) of the Securities
Act.

On September 22, 1998, the Registrant issued a stock purchase warrant to Allen
& Company Incorporated, exercisable for 318,500 shares of common stock of the
Registrant at an exercise price of $7.106 per share. This warrant is exercis-
able on or before the earliest to occur of June 30, 2005 or the acquisition of
the Registrant as a result of which stockholders of the Registrant immediately
prior to such acquisition dispose of at least 90% of their voting power of the
Registrant as a part of such acquisition. This issuance was made by the Regis-
trant in reliance upon the exemption from registration under Section 4(2) of
the Securities Act.

Pursuant to a stock purchase agreement, dated as of January 1999, fifty indi-
vidual and seven institutional investors purchased an aggregate of 630,756
shares of Series C1 preferred stock for an aggregate purchase price of
$5,985,874.44. These shares of Series C1 preferred stock were issued by the
Registrant in reliance upon the exemptions from registration under the Securi-
ties Act provided by Regulation D thereunder.

In January 1999 and April 1999, the Registrant issued stock purchase warrants
to Carolina Financial Securities and 7 of its principals exercisable for an ag-
gregate of 12,907 shares of the common stock of the Registrant at an exercise
price of $10.44 per share. These warrants terminate on the earliest to occur of
the date 5 years from the date of issuance of such warrant, the acquisition of
the Registrant, or the closing of the Registrant's initial public offering.
These warrants were issued by the Registrant in reliance upon the exemption
from registration under Section 4(2) of the Securities Act.

Pursuant to a subscription agreement as of March 1999, the Registrant issued
18,550 shares of its common stock to Mr. Daniels, III in exchange for his con-
tinuing personal guaranty of the Registrant's line of credit with First Union
from January 15, 1999 to July 15, 1999. These shares of common stock were is-
sued by the Registrant in reliance on the exemptions from registration under
Section 4(2) of the Securities Act.

Pursuant to a note and warrant purchase agreement dated as of June 1999, the
Registrant issued to Labatt Brewing Company Limited a $4,000,000 10% convert-
ible promissory note, due and payable on May 31, 2000 and convertible into the
same type of securities issued during the next round of financing, and a stock
purchase warrant exercisable for 39,888 shares of common stock at an exercise
price of $25.07 per share, terminating on May 31, 2009. These notes and war-
rants were sold for an aggregate consideration of $4,000,000. The warrants were
subsequently adjusted to be exercisable for 60,277 shares of common stock at an
exercise price of $16.59 per share upon the sale of Series D preferred stock by
the Registrant. The issuance of this note and warrant was made by the Regis-
trant in reliance upon the exemptions from registration under the Securities
Act provided by Section 4(2) thereunder.

Pursuant to an agreement and plan of merger, dated as of May 3, 1999 and effec-
tive on June 18, 1999, the Registrant issued an aggregate 284,401 shares of its
common stock to 7 institutional investors and forty individual investors in ex-
change for all of the outstanding capital stock of Long Distance Technologies,
Inc. d/b/a/ Motortrax. The issuance of such common stock was made by Registrant
in reliance upon the exemptions from registration provided by Regulation D
thereunder.

II-4
<PAGE>

Pursuant to a note and warrant purchase agreement, dated as of September 14,
1999, the Registrant sold to 3 institutional investors and 3 individual invest-
ors an aggregate of $2,500,000 convertible promissory notes and stock purchase
warrants exercisable for an aggregate 15,067 shares of common stock, at an ex-
ercise price of $16.59 per share, expiring on the earliest to occur of Septem-
ber 14, 2009, the acquisition of the Registrant, or the closing of the Regis-
trant's initial public offering. These issuances were made by the Registrant,
in each case, in reliance upon the exemptions from registration under the Secu-
rities Act provided by Regulation D thereunder.

Pursuant to a Series D preferred stock and warrant purchase agreement, dated
November 12, 1999, 18 individual and 32 institutional investors purchased an
aggregate of 2,140,955 shares of Series D preferred stock and warrants exercis-
able for 963,407 shares of Series D preferred stock, at an exercise price of
$16.59 per share, for an aggregate purchase price of approximately $35,500,000.
These shares of Series D preferred stock and warrants were issued by the Regis-
trant in reliance upon the exemptions from registration under the Securities
Act provided by Regulation D thereunder.

Pursuant to a stock purchase agreement, dated November 12, 1999, the Registrant
issued 811,423 shares of common stock and 811,423 shares of Series E preferred
stock to NBC Sports, Inc. in exchange for $17.4 million certain on-air promo-
tion and marketing of Registrant's real-time live sporting event coverage.
These shares of common stock were issued by the Registrant in reliance upon the
exemptions from registration under the Securities Act provided by Regulation D
thereunder.

As of November 12, 1999, the Registrant had issued options to purchase an ag-
gregate of 425,106 shares of Common Stock pursuant to the Registrant's 1997
Stock Plan at an average exercise price of $07.75 per share. The Registrant has
also issued an aggregate of shares of common stock to various employees upon
the exercise of options granted pursuant to the Registrant's 1997 Stock Incen-
tive Plan for an aggregate consideration of $10,339.05, at an average exercise
price of $0.90 per share. These grants of options, and the sales of common
stock upon the exercise of these options, were made in reliance on the exemp-
tions from registration under the Securities Act provided by Rule 701 thereun-
der.

The following table sets forth information regarding these grants.

<TABLE>
<CAPTION>
-------------------
Securities
Underlying Exercise
Dates of Grant Option Price
- -------------- ---------- --------
<S> <C> <C>
November 10, 1997........................................... 20,538 $ .50
January 20, 1998............................................ 7,120 $ .50
January 20, 1998............................................ 11,131 $ .55
June 1, 1998................................................ 46,126 $ .75
September 28, 1998.......................................... 8,267 $ 1.25
September 28, 1998.......................................... 4,800 $ .01
January 20, 1999............................................ 2,424 $ 1.50
January 20, 1999............................................ 4,800 $ .01
June 23, 1999............................................... 290,000 $10.20
October 1, 1999............................................. 17,300 $16.59
October 1, 1999............................................. 8,100 $ .01
</TABLE>

Item 16. Exhibits and Financial Statements Schedules.

(a)Exhibits.

<TABLE>
- ------------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1* Amended and Restated Certificate of Incorporation of Total Sports
3.2* Form of Amended and Restated Certificate of Incorporation of Total
Sports Inc.
3.3* Form of Amended and Restated Bylaws of Total Sports Inc.
</TABLE>

II-5
<PAGE>

<TABLE>
<C> <S>
4.1* Specimen certificate for shares of common stock.
4.2 See Exhibits 3.1 and 3.2 for provisions of the Certificate of
Incorporation and Bylaws of the Registrant defining of holders of common
stock of Registrant.
5.1* Opinion of Wyrick Robbins Yates & Ponton LLP.
10.1 Total Sports Inc. 1997 Stock Plan.
10.2 Employment and Noncompetition Agreement between the Registrant and John
Thorn, dated March 31, 1997.
10.3 Noncompetition, Nondisclosure and Inventions Agreement between the
Registrant and Frank A. Daniels, III, dated June 2, 1997.
10.4 Noncompetition, Nondisclosure and Inventions Agreement between the
Registrant and George Schlukbier, dated June 2, 1997.
23.1 Consents of Deloitte & Touche LLP.
23.2* Consent of Wyrick Robbins Yates & Ponton LLP.
24.1 Power of Attorney (see page II-5).
27.1 Financial Data Schedule.
</TABLE>

* To be filed in amendment.
+ Confidential treatment requested.

(b) Financial Statement Schedules.

The following financial statement schedule of Total Sports is included in Part
II of this registration statement.

Schedule II--Valuation and Qualifying Accounts and Reserves.

Schedules not listed above have been omitted because the information required
to be set forth therein is not applicable or is shown in the Financial State-
ments or the related Notes.

Item 17. Undertakings.

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

II-6
<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise the registrant has been ad-
vised that in the opinion of the Securities and Exchange Commission such indem-
nification is against public policy as expressed in the Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such lia-
bilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer, or controlling person of the registrant in the success-
ful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person will unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appro-
priate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

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

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

II-7
<PAGE>

Signatures

Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the un-
dersigned, thereunto duly authorized in The City of Raleigh, State of North
Carolina, on this 12th day of November, 1999.

Total Sports Inc.

By: /s/ Frank A. Daniels, III
---------------------------------
Name: Frank A. Daniels, III
Title:Chief Executive Officer

Power of Attorney

We, the undersigned directors and/or officers of Total Sports Inc. (the "Compa-
ny"), hereby severally constitute and appoint George Schlukbier, President, and
Petra Weishaupt, Controller, and each of them individually, with full powers of
substitution and resubstitution, our true and lawful attorneys, with full pow-
ers to them and each of them to sign for us, in our names and in the capacities
indicated below, the Registration Statement on Form S-1 filed with the Securi-
ties and Exchange Commission, and any and all amendments to said Registration
Statement (including post-effective amendments), and any registration statement
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, in
connection with the registration under the Securities Act of 1933, as amended,
of equity securities of the Company, and to file or cause to be filed the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as each of them might or could do in person, and hereby
ratifying and confirming all that said attorneys, and each of them, or their
substitute or substitutes, shall do or cause to be done by virtue of this Power
of Attorney.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the capaci-
ties indicated on the dates set forth below:

Signature Title(s) Date

/s/ Frank A. Daniels, Chief Executive Officer and November 12, 1999
III Chairman of the Board of
------------------------ Directors (Principal Executive
Frank A. Daniels, III Officer)

/s/ Petra Weishaupt Controller (Principal Financial November 12, 1999
------------------------ and Accounting Officer)
Petra Weishaupt

Director November 12, 1999
------------------------
Frank A. Daniels, Jr.

Director November 12, 1999
------------------------
Charles L. Jarvie

/s/ William W. Neal Director November 12, 1999
------------------------
William W. Neal

/s/ Robert S. Prather, Director November 12, 1999
Jr.
------------------------
Robert S. Prather, Jr.

/s/ William E. Ray Director November 12, 1999
------------------------
William E. Ray

/s/ Stuart B. Rekant Director November 12, 1999
------------------------
Stuart B. Rekant

/s/ Gary R. Stevenson Director November 12, 1999
------------------------
Gary R. Stevenson

II-8
<PAGE>

Total Sports Inc.
Schedule II--Valuation and Qualifying Accounts and Reserves

<TABLE>
---------------------------------------
<CAPTION>
Additions
Balance at Charged to Deductions Balance at
Beginning of Costs and For Payments End of
Period Expenses Or Writeoffs Period
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Period February 20, 1997
Through December 31, 1997:
Allowances for doubtful
accounts and sales returns $ $ 36,820 $ (2,000) $ 34,820
Allowance for obsolete
inventory 37,138 37,138
Deferred tax asset valuation
allowance 1,425,000 1,425,000
<CAPTION>
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
1,498,958 (2,000) 1,496,958
<CAPTION>
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1998:
Allowance for doubtful
accounts and sales returns 34,820 583,244 (177,599) 440,465
Allowance for obsolete
inventory 37,138 143,983 (37,138) 143,983
Deferred tax asset valuation
allowance 1,425,000 4,410,000 5,835,000
<CAPTION>
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
$1,496,958 $5,137,227 $ (214,737) $6,419,448
========== ========== ========= ==========
</TABLE>

S-1
<PAGE>

Exhibit Index

* To be filed in amendment.
+ Confidential treatment requested.

<PAGE>

EXHIBIT 10.1

1997 STOCK PLAN
---------------

1. Purpose. This 1997 Stock Plan (the "Plan") is intended to provide
-------
incentives:

(a) to employees of Total Sports, Inc. (the "Company"), or its parent
(if any) or any of its present or future subsidiaries (collectively, "Related
Corporations"), by providing them with opportunities to purchase Common Stock
(as defined below) of the Company pursuant to options granted hereunder that
qualify as "incentive stock options" ("ISOs") under Section 422 of the Internal
Revenue Code of 1986, as amended, or any successor statute (the "Code");

(b) to directors, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase Common Stock (as
defined below) of the Company pursuant to options granted hereunder that do not
qualify as ISOs (nonstatutory stock options, or "NSOs");

(c) to employees and consultants of the Company and Related
Corporations by providing them with bonus awards of Common Stock (as defined
below) of the Company ("Stock Bonuses"); and

(d) to employees and consultants of the Company and Related
Corporations by providing them with opportunities to make direct purchases of
Common Stock (as defined below) of the Company ("Purchase Rights").

Both ISOs and NSOs are referred to hereafter individually as "Options", and
Options, Stock Bonuses and Purchase Rights are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 424 of the Code.

2. Administration of the Plan.
--------------------------

(a) The Plan shall be administered by the Board of Directors of the
Company (the "Board"). Notwithstanding the preceding sentence, the Board may
appoint a committee (the "Committee") of two or more of its members to
administer this Plan, provided, however, in the event the Company (or any
successor thereto that maintains this Plan) registers equity securities under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), then each member of the Committee shall be a "Non-Employee Director" as
defined in Rule 16b-3 promulgated under the Exchange Act.

(b) Subject to ratification of the grant or authorization of each
Stock Right by the Board (if so required by applicable law), and subject to the
terms of the Plan, the Committee, if so appointed, shall have the authority to:

(i) determine the employees of the Company and Related
Corporations (from among the class of employees eligible under Section 3 to
receive ISOs) to whom ISOs may be granted, and to determine (from among the
class of individuals and entities eligible under
<PAGE>

Section 3 to receive NSOs, Stock Bonuses and Purchase Rights) to whom NSOs,
Stock Bonuses and Purchase Rights may be granted;

(ii) determine the time or times at which Options, Stock Bonuses
or Purchase Rights may be granted;

(iii) determine the option price of shares subject to each
Option, which price shall not be less than the minimum price specified in
Section 6 hereof, as appropriate, and the purchase price of shares subject to
each Purchase Right;

(iv) determine whether each Option granted shall be an ISO or
NSO;

(v) determine (subject to Section 7) the time or times when
each Option shall become exercisable and the duration of the exercise period;

(vi) determine whether restrictions such as repurchase options
are to be imposed on shares subject to Options, Stock Bonuses and Purchase
Rights and the nature of such restrictions, if any; and

(vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it.

If the Committee determines to issue a NSO, it shall take whatever
actions it deems necessary, under Section 422 of the Code and the regulations
promulgated thereunder, to ensure that such Option is not treated as an ISO.
The interpretation and construction by the Committee of any provisions of the
Plan or of any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Right granted under it.

(c) The Committee may select one of its members as its chairman, and
shall hold meetings at such time and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee. All references in this Plan to the Committee shall mean the Board if
no Committee has been appointed. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies however caused, or remove all members thereof and thereafter directly
administer the Plan.

3. Eligible Employees and Others. ISOs may be granted to any employee of
-----------------------------
the Company or any Related Corporation, who works a minimum of thirty (30) hours
per week. Those officers of the Company who are not employees may not be
granted ISOs under the Plan. NSOs, Stock Bonuses and Purchase Rights may be
granted to any director, employee or consultant of the Company or any Related
Corporation. Granting of any Stock Right to any individual or entity shall

2
<PAGE>

neither entitle that individual or entity to, nor disqualify him or her from,
participation in any other grant of Stock Rights.

4. Stock. The stock subject to Stock Rights shall be authorized but
-----
unissued shares of common stock of the Company, par value $.001 per share, or
such shares of the Company's capital stock into which such class of shares may
be converted pursuant to any reorganization, recapitalization, merger,
consolidation or the like (the "Common Stock"), or shares of Common Stock
reacquired by the Company in any manner. The aggregate number of shares that
may be issued pursuant to the Plan is One Million Eighty-five Thousand 1,185,000
shares, subject to adjustment as provided herein. Any such shares may be issued
as ISOs, NSOs or Stock Bonuses, or to persons or entities making purchases
pursuant to Purchase Rights, so long as the number of shares so issued does not
exceed such aggregate number, as adjusted. If any Option granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part, or if the
Company shall reacquire any shares issued pursuant to Stock Rights, the
unpurchased shares subject to such Options and any shares so reacquired by the
Company shall again be available for grants of Stock Rights under the Plan.

5. Granting of Stock Rights. Stock Rights may be granted under the Plan
------------------------
at any time after the Effective Date, as set forth in Section 16, and prior to
10 years thereafter. The date of grant of a Stock Right under the Plan will be
the date specified by the Committee at the time it grants the Stock Right;
provided, however, that such date shall not be prior to the date on which the
Committee acts. The Committee shall have the right, with the consent of the
optionee, to convert an ISO granted under the Plan to an NSO pursuant to Section
17.

6. Minimum Price; ISO Limitations.
------------------------------

(a) The price per share specified in the agreement relating to each
NSO, Stock Bonus or Purchase Right granted under the Plan shall be established
by the Committee, taking into account any noncash consideration to be received
by the Company from the recipient of Stock Rights.

(b) The price per share specified in the agreement relating to each
ISO granted under the Plan shall not be less than the fair market value per
share of Common Stock on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Related
Corporation, the price per share specified in the agreement relating to such ISO
shall not be less than 110% of the fair market value per share of Common Stock
on the date of the grant.

(c) In no event shall the aggregate fair market value (determined at
the time an ISO is granted) of Common Stock for which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all stock option plans of the Company and any Related Corporation)
exceed $100,000; provided that this Section shall have no force or effect to the
extent that its inclusion in the Plan is not necessary for Options issued as
ISOs to qualify as ISOs pursuant to Section 422 of the Code.

3
<PAGE>

(d) If, at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the time such Option is granted and
shall mean:

(i) the average as of the close of business on that date of the
high and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if the Common Stock is then traded
on a national securities exchange;

(ii) the last reported sale price as of the close of business on
that date of the Common Stock on the Nasdaq National Market System (the
"NASDAQ/NMS"), if the Common Stock is not then traded on a national securities
exchange but is then traded on the NASDAQ/NMS; or

(iii) the closing bid price or average of bid prices last quoted
on that date by an established quotation service, if the Common Stock is not
reported on the NASDAQ/NMS.

However, if the Common Stock is not publicly traded at the time
an Option is granted under the Plan, "fair market value" shall be deemed to be
the fair value of the Common Stock as determined by the Committee after taking
into consideration all factors that it deems appropriate, including, without
limitation, recent sale and offer prices on the Common Stock in private
transactions negotiated at arm's length, but determined without regard to any
restriction other than a restriction that, by its terms, will never lapse.

7. Option Duration. Subject to earlier termination as provided in
---------------
Sections 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than:

(a) 10 years from the date of grant in the case of NSOs;

(b) 10 years from the date of grant in the case of ISOs generally;
and

(c) 5 years from the date of grant in the case of ISOs granted to an
employee owning stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Related Corporation.

Subject to earlier termination as provided in Sections 9 and 10, the
term of each ISO shall be the term set forth in the original instrument granting
such ISO, except with respect to any part of such ISO that is converted into an
NSO pursuant to Section 17.

8. Exercise of Options. Subject to the provisions of Section 9 through
-------------------
Section 12 of the Plan, each Option granted under the Plan shall be exercisable
as follows:

(a) the Option shall either be fully exercisable on the date of grant
or shall become exercisable thereafter in such installments as the Committee may
specify;

4
<PAGE>

(b) once an installment becomes exercisable it shall remain
exercisable until expiration or termination of the Option, unless otherwise
specified by the Committee;

(c) each Option or installment may be exercised at any time or from
time to time, in whole or in part, for up to the total number of shares with
respect to which it is then exercisable; and

(d) the Committee shall have the right to accelerate the date of
exercise of any installment of any Option, provided that the Committee shall not
accelerate the exercise date of any installment of any ISO granted to any
employee (and not previously converted into an NSO pursuant to Section 17) if
such acceleration would violate the annual vesting limitation contained in
Section 422 of the Code, as described in Section 6(c).

9. Termination of Employment. If an ISO optionee ceases to be employed
-------------------------
by the Company and all Related Corporations other than by reason of death or
disability as defined in Section 10, unless otherwise specified in the
instrument granting such ISO, the ISO optionee shall have the continued right to
exercise any ISO held by him or her, to the extent of the number of shares with
respect to which he or she could have exercised it on the date of termination,
until the ISO's specified expiration date; provided, however, in the event the
ISO optionee exercises any ISO after the date that is three months following the
date of termination of employment, such ISO will automatically be converted into
an NSO subject to the terms of the Plan. Employment shall be considered as
continuing uninterrupted during any bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment with the Company is
guaranteed by statute or by contract. A bona fide leave of absence with the
written approval of the Company shall not be considered an interruption of
employment under the Plan, provided that such written approval contractually
obligates the Company or any Related Corporation to continue the employment of
the optionee after the approved period of absence. ISOs granted under the Plan
shall not be affected by any change of employment within or among the Company
and Related Corporations, so long as the optionee continues to be an employee of
the Company or any Related Corporation.

NOTHING IN THE PLAN SHALL BE DEEMED TO GIVE ANY GRANTEE OF ANY STOCK RIGHT
THE RIGHT TO BE RETAINED IN EMPLOYMENT OR OTHER SERVICE BY THE COMPANY OR ANY
RELATED CORPORATION FOR ANY PERIOD OF TIME.

10. Death; Disability.
-----------------

(a) If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of death, any ISO of his or hers may be exercised
to the extent of the number of shares with respect to which he or she could have
exercised it on the date of death, by his or her estate, personal representative
or beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, at any time prior to the ISO's specified expiration date, unless
otherwise specified in the instrument granting such ISO.

5
<PAGE>

(b) If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of disability, he or she shall continue to have
the right to exercise any ISO held by him or her on the date of termination
until the ISO's specified expiration date, unless otherwise specified in the
instrument granting such ISO; provided, however, in the event the optionee
exercises after the date that is one year following the date of termination,
such ISO will automatically be converted into a NSO subject to the terms of the
Plan. For the purposes of the Plan, the term "disability" shall mean "permanent
and total disability" as defined in Section 22(e)(3) of the Code.

11. Assignability. No Stock Right shall be assignable or transferable by
-------------
the grantee except with the consent of the Committee, by will or by the laws of
descent and distribution, and during the lifetime of the grantee each Stock
Right shall be exercisable only by him or her, except with the prior consent of
the Committee; provided that no such assignment shall be made in the case of an
ISO.

12. Terms and Conditions of Options. Options shall be evidenced by
-------------------------------
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in Sections 6 through 11 hereof and may contain such other
provisions as the Committee deems advisable that are not inconsistent with the
Plan, including restrictions (or other conditions deemed by the Committee to be
in the best interests of the Company) applicable to the exercise of Options or
to shares of Common Stock issuable upon exercise of Options. In granting any
NSO, the Committee may specify that such NSO shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.

13. Adjustments. Upon the occurrence of any of the following events, the
-----------
rights of a recipient of a Stock Right granted hereunder shall be adjusted as
hereinafter provided, unless otherwise provided in the written agreement between
the recipient and the Company relating to such Stock Right:

(a) If the shares of Common Stock shall be subdivided or combined
into a greater or smaller number of shares or if the Company shall issue shares
of Common Stock as a stock dividend on its outstanding Common Stock, the number
of shares of Common Stock deliverable upon the exercise of outstanding Stock
Rights shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price (if any) per share
to reflect such subdivision, combination or stock dividend.

(b) If the Company is to be consolidated with or acquired by another
entity in a merger, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), unless otherwise provided by the Committee, in its
sole discretion, all conditions to the exercisability of Options and rights of
the Company to repurchase or restrict the sale of shares of Common Stock issued
pursuant to exercise of a Stock Right shall lapse and the Committee or the

6
<PAGE>

board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board") shall, as to outstanding Options, make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Acquisition.

(c) In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subsection (b) above) pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon exercising
an Option shall be entitled to receive for the purchase price paid upon such
exercise the securities he or she would have received if he or she had exercised
the Option immediately prior to such recapitalization or reorganization.

(d) Notwithstanding the foregoing, any adjustments made pursuant to
subsections (a), (b) or (c) with respect to ISOs shall be made only after the
Committee determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424 of the Code) or would cause
any adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments as to all
or some of such ISOs.

(e) In the event of the proposed dissolution or liquidation of the
Company, each Option will terminate immediately prior to the consummation of
such proposed action or at such other time and subject to such other conditions
as shall be determined by the Committee.

(f) Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares subject to Options. No
adjustments shall be made for dividends paid in cash or in property other than
Common Stock of the Company.

(g) No fractional shares shall be issued under the Plan and any
optionee who would otherwise be entitled to receive a fraction of a share upon
exercise of an Option shall receive from the Company cash in lieu of such
fractional shares in an amount equal to the fair market value of such fractional
shares, as determined in the sole discretion of the Committee.

(h) Upon the happening of any of the foregoing events described in
subsections (a), (b) or (c) above, the class and aggregate number of shares set
forth in Section 4 hereof that are subject to Stock Rights that previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events described. The Committee or the Successor Board
shall determine the specific adjustments to be made under this Section 13 and,
subject to Section 2, its determination shall be conclusive.

14. Means of Exercising Stock Rights. A Stock Right (or any part or
--------------------------------
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to

7
<PAGE>

which such Stock Right is being exercised, accompanied by full payment of the
exercise price therefor either (a) in United States dollars in cash or by check,
(b) at the discretion of the Committee, through the delivery of already-owned
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Stock Right, or (c) at the discretion
of the Committee, by delivery of the grantee's personal recourse note bearing
interest payable not less than annually at no less than 100% of the lowest
applicable Federal rate, as defined in Section 1274(d) of the Code, or (d) at
the discretion of the Committee, by any combination of (a), (b) and (c). If the
Committee exercises its discretion to permit payment of the exercise price of an
ISO by means of the methods set forth in clauses (b), (c) or (d) of the
preceding sentence, such discretion shall be exercised in writing at the time of
the grant of the ISO in question. The holder of a Stock Right shall not have the
rights of a shareholder with respect to the shares covered by the Stock Right
until the date of issuance of a stock certificate for such shares. Except as
expressly provided above in Section 13 with respect to changes in capitalization
and stock dividends, no adjustment shall be made for dividends or similar rights
for which the record date is before the date such stock certificate is issued.

15. Stock Appreciation Rights; Surrender of Options. The Committee may,
-----------------------------------------------
in its sole and absolute discretion and subject to such terms and conditions as
it deems appropriate, accept the surrender by an optionee of an Option granted
to him under the Plan and authorize payment in consideration therefor of an
amount equal to the difference between the purchase price payable for the shares
of Common Stock under the instrument granting the Option and the fair market
value of the shares subject to the Option (determined as of the date of such
surrender of the Option). Such payment shall be made in shares of Common Stock
valued at fair market value on the date of such surrender, or in cash, or partly
in such shares of Common Stock and partly in cash as the Committee shall
determine. The surrender shall be permitted only if the Committee determines
that such surrender is consistent with the purpose set forth in Section 1, and
only to the extent that the Option is exercisable under Section 8 on the date of
surrender. In no event shall an optionee surrender his Option under this
Section if the fair market value of the shares on the date of such surrender is
less than the purchase price payable for the shares of Common Stock subject to
the Option. Any ISO surrendered pursuant to the provisions of this Section 15
shall be deemed to have been converted into a NSO immediately prior to such
surrender.

16. Term and Amendment of Plan. This Plan was adopted by the Board on
--------------------------
September __, 1997 (the "Effective Date"), subject (with respect to the
validation of ISOs granted under the Plan) to approval of the Plan by the
shareholders of the Company. If the approval of shareholders is not obtained by
one year after the Effective Date, any grants of ISOs under the Plan made prior
to that date will be rescinded. The Plan shall expire 10 years after the
Effective Date (except as to Stock Rights outstanding on that date). Subject to
the provisions of Section 5 above, Stock Rights may be granted under the Plan
prior to the date of shareholder approval of the Plan. The Board may terminate
or amend the Plan in any respect at any time, except that without the approval
of the shareholders obtained within 12 months before or after the Board adopts a
resolution authorizing any of the following actions,

(a) the total number of shares that may be issued under the Plan may
not be increased (except by adjustment pursuant to Section 13);

8
<PAGE>

(b) the provisions of Section 3 regarding eligibility for grants of
ISOs may not be modified;

(c) the provisions of Section 6(b) regarding the exercise price at
which shares may be offered pursuant to ISOs may not be modified (except by
adjustment pursuant to Section 13); and

(d) the expiration date of the Plan may not be extended.

Except as provided in Section 13(b) and the second sentence of this Section
16, in no event may action of the Board or shareholders alter or impair the
rights of a grantee, without his or her consent, under any Stock Right
previously granted.

17. Conversion of ISOs into NSOs; Termination of ISOs. The Committee, at
-------------------------------------------------
the request of any optionee, may in its discretion take such actions as may be
necessary to convert such optionee's ISOs (or any installments or portions of
installments thereof) that have not been exercised on the date of conversion
into NSOs at any time prior to the expiration of such ISOs. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Committee (with the consent of the optionee) may impose
such conditions on the exercise of the resulting NSOs as the Committee in its
discretion may determine, provided that such conditions shall not be
inconsistent with the Plan. Nothing in the Plan shall be deemed to give any
optionee the right to have such optionee's ISOs converted into NSOs, and no such
conversion shall occur until and unless the Committee takes appropriate action.
The Committee, with the consent of the optionee, may also terminate any portion
of any ISO that has not been exercised at the time of such termination.

18. Application of Funds. The proceeds received by the Company from the
--------------------
sale of shares pursuant to Stock Rights shall be used for general corporate
purposes.

19. Governmental Regulation. The Company's obligation to sell and deliver
-----------------------
shares of the Common Stock under the Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

20. Withholding of Additional Income Taxes.
--------------------------------------

(a) Upon the exercise of an NSO, or the grant of a Stock Bonus or
Purchase Right for less than the fair market value of the Common Stock, the
making of a Disqualifying Disposition (as defined in Section 21), the vesting of
restricted Common Stock acquired on the exercise of a Stock Right hereunder or
the surrender of an Option pursuant to Section 15, the Company, in accordance
with Section 3402(a) of the Code and any applicable state statute or regulation,
may require the optionee, Stock Bonus recipient or purchaser to pay to the
Company additional withholding taxes in respect of the amount that is considered
compensation includable in such person's gross income. With respect to (a) the
exercise of an Option, (b) the grant of a Stock Bonus, (c) the grant of a
Purchase Right of Common Stock for less than its fair market value, (d) the
vesting of restricted Common Stock acquired by exercising a Stock Right, or (e)
the acceptance

9
<PAGE>

of a surrender of an Option, the Committee in its discretion may condition such
event on the payment by the optionee, Stock Bonus recipient or purchaser of any
such additional withholding taxes.

(b) At the sole and absolute discretion of the Committee, the holder
of Stock Rights may pay all or any part of the total estimated federal and state
income tax liability arising out of the exercise or receipt of such Stock
Rights, the making of a Disqualifying Disposition, or the vesting of restricted
Common Stock acquired on the exercise of a Stock Right hereunder (each of the
foregoing, a "Tax Event") by tendering already-owned shares of Common Stock or
(except in the case of a Disqualifying Disposition) by directing the Company to
withhold shares of Common Stock otherwise to be transferred to the holder of
such Stock Rights as a result of the exercise or receipt thereof in an amount
equal to the estimated federal and state income tax liability arising out of
such event. In such event, the holder of Stock Rights must, however, notify the
Committee of his or her desire to pay all or any part of the total estimated
federal and state income tax liability arising out of a Tax Event by tendering
already-owned shares of Common Stock or having shares of Common Stock withheld
prior to the date that the amount of federal or state income tax to be withheld
is to be determined. For purposes of this Section 20, shares of Common Stock
shall be valued at their fair market value on the date that the amount of the
tax withholdings is to be determined.

21. Notice to Company of Disqualifying Disposition. Each employee who
----------------------------------------------
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition (as defined below) of any Common
Stock acquired pursuant to the exercise of an ISO. A "Disqualifying
Disposition" is any disposition (including any sale) of such Common Stock before
either (a) two years after the date the employee was granted the ISO, or (b) one
year after the date the employee acquired Common Stock by exercising the ISO.
If the employee has died before such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.

22. Governing Law; Construction. The validity and construction of the
---------------------------
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of North Carolina. In construing this Plan, the singular shall
include the plural and the masculine gender shall include the feminine and
neuter, unless the context otherwise requires.

23. Lock-up Agreement. Each recipient of securities hereunder agrees, in
-----------------
connection with the first registration with the United States Securities and
Exchange Commission under the Securities Act of 1933, as amended, of the public
sale of the Company's Common Stock, upon request of the Company or any
underwriters managing such offering, not to sell, make any short sale of, loan,
grant any option for the purchase of or otherwise dispose of any securities of
the Company (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as the Company or the underwriters, as the case may be, shall
specify. Each such recipient agrees that the Company may instruct its transfer
agent to place stop-transfer notations in its records to enforce this Section
23.

<PAGE>

EXHIBIT 10.2

EMPLOYMENT AND NONCOMPETITION AGREEMENT

THIS AGREEMENT is made and entered into as of this 31st day of March 1997
by and between Total Ltd. ("Employer") and John Thorn ("Employee").

RECITALS

A. Pursuant to an Agreement of Merger and Plan of Reorganization dated as
of March 31, 1997 by and among Employer, Sports Extra Acquisition Corporation
("SEI Acquisition"), Sports Extra, Inc. ("SEI") and the stockholders of SEI,
including Employee (the "Merger Agreement"), Employer and SEI combined their
operations through a merger of SEI into SEI Acquisition, a wholly owned
subsidiary of Employer

B. Prior to the Merger, Employee was an executive officer actively
involved in the operation of SEI's business based in Westport, Connecticut (the
"Business").

C. In order to ensure a smooth transition of operational responsibility
for the Business, Employer is desirous of retaining the services of Employee as
an employee of Employer.

D. Employee is desirous of continuing to be associated with the Business
and has agreed to accept employment with Employer.

E. Employer and Employee are desirous of documenting the terms and
conditions of said employment relationship.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants of the parties set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, IT IS
HEREBY AGREED AS FOLLOWS:

AGREEMENT

1. Employment. Subject to and upon the terms and conditions herein
----------
provided, the Employer hereby agrees to employ the Employee and the Employee
hereby agrees to be employed by the Employer for the term of this Agreement,
which term shall begin as of the Agreement Date and shall continue until
terminated as provided herein.

2. Employee Responsibilities. During the Term (as defined in Section 4),
-------------------------
Employee shall serve as Executive Vice President of Employer. In the
performance of his responsibilities, Employee shall be subject to all of
Employer's policies, rules and regulations applicable to employees of its
subsidiaries of comparable status. Employee shall perform duties consistent
with
<PAGE>

Employee's prior knowledge, experience and position with SEI and the duties and
authority of employees of Employer and its subsidiaries of comparable status. In
performing such duties, Employee shall be subject to and shall abide by all
policies and procedures developed by Employer for comparable employees of
Employer's subsidiaries. Specifically excluded in this Paragraph 2 will be the
Employee's right to publish magazine articles, make personal appearances and
publish book-length manuscripts, in which the Employer has no proprietary
interest, subject to the Employer's right of first refusal. The Employee
warrants that such activities will not interfere with the performance of his
duties as a full-time employee of the Employer.

During the Term, Employee shall devote his entire business time, energies,
skills and attention to the affairs and activities of Employer and the discharge
of his duties and responsibilities. Employer shall not be entitled to require
of Employee materially more time, travel or imposition than was required of
Employee by the Business prior to the Merger.

3. Compensation.
------------

3.1 Base Salary. In consideration for the services provided
-----------
hereunder, Employer shall pay to Employee an annual base salary of $100,000 (the
"Base Salary"). The Base Salary shall be payable in conformity with Employer's
customary payroll practices.

3.2 Bonus. During the Term of this Agreement, Employee shall receive
-----
a signing bonus ("Bonus") payable as follows: (a) $50,000 on the Effective Time
(as defined in Section 4), (b) $25,000 on the six (6) month anniversary of the
Effective Time, and (c) $25,000 on the one (1) year anniversary of the Effective
Time, subject in each case to Employee's continued employment at the time such
bonus becomes due (except as provided in Sections 5.2 or 5.4).

3.3 Additional Compensation. In addition to his Base Salary and
-----------------------
Bonus, Employee shall be entitled to the following additional compensation.

a. Employee, at Employer's expense shall be eligible to participate
in Employer employee benefit plans as may be provided by Employer from time to
time to executive employees of comparable status on the same basis of such
executive employees, subject to, and to the extent that, Employee is eligible
under such benefit plans in accordance with their respective terms.

b. Employee shall be eligible to participate in any stock option,
purchase or other equity compensation plans on the same basis as Employer
executive employees of comparable status. Grants of stock options under
Employer's existing stock option programs are discretionary.

2
<PAGE>

c. Employee shall be eligible to participate in any annual or long-
term cash bonus plan that is offered to other Employer executive employees.

d. Employee shall be entitled to reasonable periods of paid
vacation, personal and sick leave during the Term in accordance with Employer's
policies regarding vacation and leaves for executive employees of comparable
status.

e. Employer shall pay or reimburse Employee for all of his out of
pocket expenses reasonably incurred in performing the services on behalf of
Employer, including, but not limited to, overnight delivery charges, long
distance telephone and facsimile charges and travel expenses (including airfare,
hotels, car rental expenses and meals), all in accordance with Employer's
expense reimbursement policy. Payment shall be due after Employer's receipt of
Employee's invoice or expense report therefor and in accordance with Employer's
expense reimbursement policies.

f. During the Term, Employer shall provide the Employee with health
insurance, in scope and coverage equivalent to that provided to other Employer
executive employees of comparable status. Employee shall receive a monthly
payment of $300 as reimbursement for medical coverage until Employee passes the
pre-existing condition period required under Employer's current medical plan.

With respect to each of the items of benefit listed in this Section 3 and any
vesting or other criteria for eligibility applicable thereto, Employee shall be
credited with length of service beginning as of the initial date of his
employment by Employer, except as otherwise required by law.

4. Term. The term of this Agreement shall commence and this Agreement
----
shall be effective upon the effective time of the Merger (as that term is
defined in the Merger Agreement (the "Effective Time")) and shall terminate on
the earlier to occur of (i) the three year anniversary of the Effective Time,
(ii) Employee's death (however, the Bonus referenced in Section 3.2 shall be
payable to Employee's estate, heirs or assigns in full, even in the event of
Employee's death prior to the payment date), (iii) a determination that Employee
has become disabled, as defined in Section 5.4, (iv) termination "for cause"
under the provisions of Section 5.1, (v) termination without cause as provided
in section 5.2, or (vi) voluntary termination by Employee as provided in Section
5.3.

5. Termination.
-----------

5.1 For Cause By Employer. During the Term, Employer may terminate
---------------------
Employee's employment under this Agreement at any time for "Cause". For purposes
of this Section 5.1 and Section 5.2, "Cause" means:

3
<PAGE>

(a) Employee's conviction of any crime (whether or not involving
Employer) which constitutes a felony in the jurisdiction involved (other than
unintentional motor vehicle felonies);

(b) any act of theft, fraud or embezzlement, or any other willful
misconduct or dishonest behavior by Employee in connection with his work with
Employer;

(c) Employee's continuing and willful failure or refusal to perform
his reasonably assigned duties (consistent with past practice including past
employment by Sports Extra, Inc.) under this Agreement in accordance with
Section 2 (other than due to his incapacity due to illness or injury), provided
that such failure or refusal continues uncorrected for a period of thirty (30)
days after Employee shall have received written notice stating the nature of
such failure or refusal; or

(d) Employee's violation of any of his material obligations contained
in this Agreement or that certain Employee Nondisclosure and Developments
Agreement dated as of the date hereof and attached as Exhibit A hereto.
----------

5.2 Without Cause by Employer. During or after the Term, Employer may
-------------------------
terminate Employee's employment under this Agreement at any time and for any
reason without Cause. If Employer terminates Employee's employment pursuant to
the provisions of this Section 5.2 during or after the Term, Employee shall
continue to receive the Base Salary being paid to him immediately prior to such
termination, the Bonus as defined in Section 3.2 and the benefits provided for
in Sections 3.3(a) (except pension, profit-sharing, disability and 401(k)
plans), and 3.3(f), plus accrued but unpaid salary and vacation pay as of the
date of termination (collectively, the "Termination Payment") for the remainder
of the Term or for one month for every full year of employment under this
Agreement, whichever is greater. Notwithstanding the foregoing, if Employee
secures employment with another employer while continuing to receive benefits
under this Section 5.2, then the Termination Payment shall be reduced by the
amount of salary and other benefits payable to Employee pursuant to such new
employment. In the event of any such termination, Employee shall be entitled to
the applicable Termination Payment set forth above and no further severance or
other compensation benefits.

5.3 Without Cause by Employee. During the Term, Employee may
-------------------------
voluntarily terminate his employment by giving Employer written notice no less
than two (2) weeks in advance of the effective date of such termination. If
Employee voluntarily terminates his employment pursuant to the provisions of
this Section 5.3 or dies, Employee shall not be entitled to receive any
compensation or benefits following the date of such termination or death other
than the proceeds of, or payment of any benefits under, any pension plans or
other similar plans in effect on the date thereof. In the event of any such
termination, Employee shall be entitled to accrued and unpaid

4
<PAGE>

salary and vacation through the termination date and no further severance or
other compensation benefits.

5.4 Termination for Disability. During the Term, Employee's
--------------------------
employment may be terminated by either party in the event Employee suffers a
physical or mental disability (as defined below) which in the reasonable opinion
of Employer renders him substantially unable to perform his duties under this
Agreement. Employee shall be deemed to be permanently disabled in the event
that Employee has been unable for a period of ninety (90) consecutive days or
one hundred eighty (180) nonconsecutive days during any 360-day period to
perform the services contemplated hereby as a result of incapacity because of a
physical or mental illness or injury. If Employee is terminated under this
Section 5.4, he shall be entitled to any Bonus remaining unpaid as well as such
benefits as are generally available under Employer's disability insurance
policies, if any.

6. Non-Disclosure. In connection with his or her employment by Employer
--------------
pursuant to the terms of this Agreement, Employee shall execute, prior to the
execution hereof by the Company, the Employee Nondisclosure and Developments
Agreement attached hereto as Exhibit A, the terms and conditions of which are
---------
incorporated herein by reference.

7. Possession. Employee agrees that upon termination of this Agreement,
----------
or upon request by Employer, Employee shall turn over to Employer all documents,
files, office supplies and any other material or work product in his possession
or control which were created pursuant to or derived from Employee's services to
Employer.

8. Noncompetition.
--------------

8.1 Noncompetition Provisions. Employee recognizes and agrees that
-------------------------
Employer has many substantial, legitimate business interests that can be
protected only by Employee agreeing not to compete with Employer or its
subsidiaries under certain circumstances. These interests include, without
limitation, Employer's contacts and relationships with its customers, Employer's
reputation and goodwill in the industry, the financial and other support
afforded by Employer, and Employer's rights in its confidential information.
Employee therefore agrees that he will not during the Term and for one (1) year
thereafter or such shorter period as Employer continues to pay Employee the
Termination Payments under Section 5.2 (provided that Employer may elect to
continue such Termination Payments longer than required under Section 5.2),
directly or indirectly without the prior written consent of Employer, engage in
any of the following activities within the countries of North America (the
"Protected Zones"), relating to the Protected Businesses (as defined below):

(a) engage in, manage, operate, control or supervise, or participate
in the management, operation, control or supervision of, any business or entity
which provides products or services competitive with those provided by Employer
as of the

5
<PAGE>

date hereof (the "Protected Businesses") in the Protected Zones;

(b) have any ownership or financial interest, directly or indirectly,
in any entity in the Protected Zones engaged in the Protected Businesses,
including, without limitation, as an individual, partner, shareholder (other
than as a shareholder of a publicly-owned corporation in which Employee owns
less than 1% of the outstanding shares of such corporation), officer, directly,
employee, principal, agent or consultant;

(c) solicit, acquire or conduct any Protected Business from or with
any of Employer's customers (as defined below) in the Protected Zones;

(d) solicit any of the employees or independent contractors of
Employer or induce any such persons to terminate their employment or contractual
relationships with any such entities; or

(e) serve as an officer or director of, or hold an equity interest
in, any entity engaged in any of the Protected Businesses in the Protected
Zones.

For purposes of this Section 8, Employer's customers shall include those
customers to whom Employer was providing products or services at the termination
of Employee's employment, or had proposals outstanding for the provision of
services, at the time of such termination.

8.2 Separate Covenants. The parties understand and agree that the
------------------
noncompetition agreement set forth in this Section 8 shall be construed as a
series of separate covenants not to compete: one covenant for each country,
state and province within the Protected Zone, one for each separate line of
business of Employer, and one for each month of the noncompetition period. If
any restriction set forth in this Section 8 is held by a court of competent
jurisdiction to be unenforceable with respect to one or more geographic areas,
lines of business and/or months of duration, then Employee agrees, and hereby
submits, to the reduction and limitation of such restriction to the minimal
effect necessary so that the provisions of this Section 8 shall be enforceable.

8.3 Limitation. Nothing contained in this Agreement or the Exhibit
----------
hereto shall prohibit Employee from utilizing his skill, acumen or experience
after a termination of his employment with Employer in any business not in
violation of this Section 8 at any location not in violation of this Section 8.

6
<PAGE>

9. Saving Provision. Employer and Employee agree and stipulate that the
----------------
agreements set out in Sections 6 and 8 above are fair and reasonably necessary
for the protection of the business, goodwill, confidential information, and
other protectable interests of Employer in light of all of the facts and
circumstances of the relationship between Employee and Employer. In the event a
court of competent jurisdiction should decline to enforce those provisions, they
shall be deemed to be modified to restrict Employee to the maximum extent which
the court shall find enforceable; however, in no event shall the above
provisions be deemed to be more restrictive to Employee than those contained
herein.

10. Injunctive Relief. Employee acknowledges that the breach or threatened
-----------------
breach of any of the nondisclosure or noncompetition covenants contained herein
would give rise to irreparable injury to Employer which injury would be
inadequately compensable in money damages. Accordingly, Employer may seek and
obtain a restraining order and/or injunction prohibiting the breach or
threatened breach of any provision, requirement or covenant of this Agreement,
in addition to and not in limitation of any other legal remedies which may be
available. Employee further acknowledges and agrees that the agreements set out
above are necessary for the protection of Employer's legitimate goodwill and
business interests and are reasonable in scope and content.

11. Enforcement. The provisions of this Agreement shall be enforceable
-----------
notwithstanding the existence of any claim or cause of action against Employer
by Employee or against Employee by Employer, whether predicated on this
Agreement or otherwise.

12. Governing Law. This Agreement, the employment relationship
-------------
contemplated herein and any claim arising from such relationship, whether or not
arising under this Agreement, shall be governed by and construed in accordance
with the internal laws of the State of North Carolina, without regard to
conflict of law principles.

13. Waiver of Breach. The waiver of any breach of any provision of this
----------------
Agreement or failure to enforce any provision hereof shall not operate or be
construed as a waiver of any subsequent breach by any party.

14. Modification. This Agreement may be modified, and the rights, remedies
------------
and obligations contained in any provision hereof may be waived, only in
accordance with this Section. No waiver by either party or any breach by the
other or any provision hereof shall be deemed to be a waiver of any later or
other breach thereof or as a waiver of any other provision of this Agreement.
This Agreement may not be waived, changed, discharged or terminated orally or by
any course of dealing between the parties, but only by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought. No modification or waiver by Employer shall be effective without the
consent of at least a majority of

7
<PAGE>

the members of the Board of Directors of Employer then in office at the time of
such modification or waiver.

15. Entirety. This Agreement, including any exhibits hereto, as it may be
--------
amended pursuant to the terms hereof, represents the complete and final
agreement of the parties and shall control over any other statement,
representation or agreement by Employer (e.g., as may appear in employment or
----
policy manuals). This Agreement supersedes any prior negotiations or
discussions between the parties.

16. Survival. The provisions of this Agreement relating to post-
--------
termination compensation (including without limitation Termination Payment and
related rights) and confidentiality and noncompetition shall survive the
termination of this Agreement.

17. Severability. Without in any way limiting the provisions of Section
------------
8.2, in case any one or more of the provisions contained in this Agreement or
the other agreements executed in connection with the transactions contemplated
hereby for any reason shall be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or such other agreements, but this
Agreement or such other agreements, as the case may be, shall be construed and
reformed to the maximum extent permitted by law.

18. Binding Effect. This Agreement shall inure to the benefit of Employee
--------------
and his heirs, successors, personal representatives and assigns. Employee
acknowledges that the services to be rendered by him thereunder are unique and
personal in nature. Accordingly, Employee may not assign any of his or her
rights or delegate any of his or her duties or obligations under this Agreement.
Employer shall have the right to assign this Agreement to any successor of all
of its business or assets, and any such successor shall be bound by all of the
provisions hereof.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

8
<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement
effective as of the day and year first set forth above.

EMPLOYER:
--------

Total Ltd.

By: /s/ Frank A. Daniels, III
-----------------------------

Title: CEO
-------------------------

EMPLOYEE:
--------

/s/ John Thorn
--------------------------------
John Thorn

9
<PAGE>

EXHIBIT A
---------

EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENT

THIS EMPLOYEE NONDISCLOSURE AND DEVELOPMENTS AGREEMENT IS made and entered
into this ____ day of March 19__, by and between Total Ltd., a North Carolina
corporation (the "Company") and ___________________________________ (the
"Employee").

WHEREAS, the Company desires to employ, or to continue the employment of,
the Employee subject to the terms and conditions set forth herein; and

Employee desires to be employed or to continue employment with the Company
and is willing to agree to the terms and conditions set forth herein; and

Employee understands that, in its business, the Company has developed and
uses commercially valuable technical and nontechnical information and that, to
guard the legitimate interests of the Company, it is necessary for the Company
to keep such information confidential and to protect such information as trade
secrets or by patent or copyright; and

Employee recognizes that the computer programs, system documentation,
manuals and other materials developed by the Company are the proprietary
information of the Company, that the Company regards this information as
valuable trade secrets and that its use and disclosure must be carefully
controlled; and

Employee further recognizes that, although some of the Company's customers
and suppliers are well known, other customers, suppliers and prospective
customers and suppliers are not so known, and the Company views the names and
identities of these customers, suppliers and prospective customers and
suppliers, as well as the content of any sales proposals, as being the Company's
trade secrets; and

Employee further recognizes that any ideas, software or company processes
that presently are not being sold, and that therefore are not public knowledge,
are considered trade secrets of the Company; and

Employee understands that special hardware and/or software developed by the
Company is subject to the Company's proprietary rights and that the Company may
treat those developments, whether hardware or software, as either trade secrets,
copyrighted material or patentable material, as applicable; and

Employee understands that all such information is vital to the success of
the Company's business and that Employee, through Employee's employment, may
become acquainted with such information and may contribute to that information
through
<PAGE>

inventions, discoveries, improvements, software development, or in some other
manner;

NOW, THEREFORE, in consideration of the premises and Employee's
commencement or continuation of employment, the parties agree as follows.

1. Employee will not at any time, whether during or after the termination
of his/her employment, reveal to any person or entity any of the trade secrets
or confidential information concerning the organization, business or finances of
the Company or of any third party that the Company is under an obligation to
keep confidential (including but not limited to trade secrets or confidential
information respecting inventions, research, products, designs, methods, know-
how, formulae, techniques, systems, processes, software programs, works of
authorship, customer lists, projects, plans and proposals), except as may be
required in the ordinary course of performing his/her duties as an employee of
the Company, and Employee shall keep secret all matters entrusted to him/her and
shall not use or attempt to use any such information in any manner that may
injure or cause loss to the Company.

2. If at any time or times during Employee's employment, Employee shall
(either alone or with others) make, conceive, discover or reduce to practice any
invention, modification, discovery, design, development, improvement, process,
software program, work of authorship, documentation, formula, data, technique,
know-how, secret or intellectual property right whatsoever or any interest
therein (whether or not patentable or registrable under copyright or similar
statutes or subject to analogous protection) (herein called "Developments") that
relates to the business of the Company or any of the products or services being
developed, manufactured or sold by the Company or that may be used in relation
therewith, such Developments and the benefits thereof shall immediately become
the sole and absolute property of the Company and its assigns, and Employee
shall promptly disclose to the Company each such Development and hereby assigns
any rights Employee may have or acquire in the Developments and benefits and/or
rights resulting therefrom to the Company and its assigns without further
compensation and shall communicate, without cost or delay, and without
publishing the same, all available information relating thereto to the Company.
Upon the request of the Company, the Employee will execute and deliver all
documents and do other acts which are or may be necessary to document such
transfer or to enable the Company to file and prosecute applications for and to
acquire, maintain, extend and enforce any and all patents, trademark
registrations or copyrights under United States or foreign law with respect to
any such developments. Specifically excluded in this Paragraph 2 will be the
Employee's right to publish magazine articles, make personal appearances and
publish book-length manuscripts, in which the Employer has no proprietary
interest, subject to the Employer's right of first refusal. The Employee
warrants that

2
<PAGE>

such activities will not interfere with the performance of his duties as a full-
time employee of the Employer.

Notwithstanding the foregoing, this Agreement shall not be construed to
apply to, and shall not create any assignment of, any Developments of the
Employee that are covered by Section 66-57.1 of the North Carolina General
Statutes, a copy of which is attached hereto as Exhibit A.
---------

3. No Solicitation. During the Employee's employment, and for a period
---------------
of one (1) year thereafter, the Employee will not solicit business from any
person or entity to whom the Company or any of its affiliates has sold its
products or services; nor shall the Employee contact, communicate with, solicit
or attempt to recruit or hire, any employee of the Company or any of its
affiliates with the intent or effect of inducing or encouraging said employee to
leave the employ of the Company or any of its affiliates or to breach other
obligations to the Company.

4. Employee understands that this Agreement does not create an obligation
on the Company or any other person or entity to continue Employee's employment.

5. Employee represents that the Developments, if any, identified on
Exhibit B attached hereto comprise all the unpatented and uncopyrighted
- ---------
Developments that Employee has made or conceived prior to or otherwise not in
connection with Employee's employment by the Company, which Developments are
excluded from this Agreement. Employee understands that it is necessary only to
list the title and purpose of such Developments but not details thereof.

Employee further represents that Employee's performance of all the terms of
this Agreement and as an employee of the company does not and will not breach
any agreement to keep in confidence proprietary information acquired by Employee
in confidence or in trust prior to Employee's employment by the company.
Employee has not entered into, and Employee agrees he/she will not enter into,
any agreement either written or oral in conflict herewith.

6. Any waiver by the Company of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of such provision or any other provision hereof.

7. Employee hereby agrees that each provision herein shall be treated as
a separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to scope, activity or subject so
as to be unenforceable at law, such

3
<PAGE>

provision or provisions shall be construed by the appropriate judicial body by
limiting and reducing it or them, so as to be enforceable to the maximum extent
compatible with the applicable law as it shall then exist.

8. Employee's obligations under this Agreement shall survive the
termination of Employee's employment regardless of the manner of such
termination and shall be binding upon Employee's heirs, executors,
administrators and legal representatives.

9. The term "Company" shall include Total Ltd. and any of its
subsidiaries, subdivisions or affiliates. The Company shall have the right to
assign this Agreement to its successors and assigns, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by said
successors or assigns. This Agreement may be amended only in a writing signed by
each of the parties hereto.

10. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina. This Agreement may be executed in
counterparts.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as a
sealed instrument as of the date first above written.

EMPLOYEE:

______________________________________
(Printed or Typed Name)

________________________________(SEAL)
(Signature)

COMPANY:

TOTAL LTD.

By: __________________________________

Title: _______________________________

4
<PAGE>

EXHIBIT A

SECTION 66-57.1 OF THE NORTH CAROLINA GENERAL STATUTES
------------------------------------------------------

Any provision in an employment agreement which provides that the
[employee] shall assign or offer to assign any of his rights in an invention to
his employer shall not apply to an invention that the employee developed
entirely on his own time without using the employer's equipment, supplies,
facility or trade secret information except for those inventions that:

(i) relate to the employer's business or actual or demonstrably
anticipated research or development, or

(ii) result from any work performed by the employee for the employer.

To the extent a provision in an employment agreement purports to apply to
the type of invention described, it is against the public policy of this State
and [is] unenforceable. The employee shall bear the burden of proof in
establishing that his invention qualifies under this section.

<PAGE>

EXHIBIT 10.3

NONCOMPETITION, NONDISCLOSURE AND INVENTIONS AGREEMENT

The undersigned, in consideration of and as a condition of my employment
(including my position as Chief Executive Officer or other officer) with Total,
Ltd., a North Carolina corporation (the "Company"), does hereby agree with the
Company as follows:

1. During the period of my employment by the Company, I will devote at
least five (5) business days per month and my best efforts to the business of
the Company, and I agree that I will not, directly or indirectly, alone or as a
partner, officer, director, employee, consultant, agent, independent contractor
or shareholder of any company or business organization, engage in any other
business activity directed to the creation, storage, distribution, marketing or
sales/licensing of sports-related information in any media (the "Protected
Business"); provided, however, that the record or beneficial ownership by me of
-------- -------
1% or less of the outstanding publicly traded capital stock of any such company
shall not be deemed to be in violation of this Section 1, provided that I am not
an officer, director or employee of such company.

2. For the shorter of (i) the period of time that the Company continues
paying my base salary in effect prior to such termination or (ii) a period of
two (2) years after the termination or cessation of my employment with the
Company for any reason, I agree that I will not, directly or indirectly, alone
or as a partner, officer, director, employee, consultant, agent, independent
contractor or shareholder of any company or business organization, engage in the
Protected Business ("Competitive Activity"). I further agree that, for the
shorter of (i) the period of time that the Company continues paying my base
salary in effect prior to such termination or (ii) a period of two (2) years
after the termination or cessation of my employment with the Company for any
reason, I will not in any capacity, either separately, jointly or in association
with others, directly or indirectly, solicit or contact in connection with, or
in furtherance of, a Competitive Activity any of the Company's employees,
consultants, agents, suppliers or customers with respect to the Company at any
time during the one (1) year immediately preceding the date of my termination of
employment or that become such with respect to the Company at any time during
the one (1) year immediately following the date of my termination. My
obligations under this Section 2 shall survive the termination or cessation of
my employment and shall be binding upon my heirs, executors and administrators.

3. Except as required by law, I will not, whether during or after the
termination or cessation of my employment, reveal to any person, association or
company any of the trade secrets or confidential information concerning the
organization, business or finances of the Company so far as they have come or
may come to my knowledge, except as may be required in the ordinary course of
performing my duties as an employee of the Company or except as may be in the
public domain through no fault of mine or as required to be disclosed by law or
court order, and I shall keep secret all matters entrusted to me and shall not
use or attempt to use any such information in any manner which may injure or
cause loss or may be calculated to injure or cause loss whether directly or
indirectly to the Company.
<PAGE>

Further, I agree that during my employment I shall not make, use or permit
to be used any notes, memoranda, drawings, specifications, programs, data or
other materials of any nature relating to any matter within the scope of the
business of the Company or concerning any of its dealings or affairs otherwise
than for the benefit of the Company. I further agree that I shall not, after
the termination of my employment, use or permit to be used any such notes,
memoranda, drawings, specifications, programs, data or other materials, it being
agreed that any of the foregoing shall be and remain the sole and exclusive
property of the Company and that immediately upon the termination or cessation
of my employment I shall deliver all of the foregoing, and all copies thereof,
to the Company, at its main office.

4. If at any time or times during my employment, I shall (either alone or
with others) make, conceive, discover, reduce to practice or become possessed of
any invention, modification, discovery, design, development, improvement,
process, formula, data, technique, know-how, secret or intellectual property
right relating primarily to the Protected Business or any interest therein
(whether or not patentable or registrable under copyright or similar statutes or
subject to analogous protection) (herein called "Inventions"), such Inventions
and the benefits thereof shall immediately become the sole and absolute property
of the Company, and I shall promptly disclose to the Company (or any persons
designated by it) each such Invention and hereby assign any rights I may have or
acquire in the inventions and benefits and/or rights resulting therefrom to the
Company without compensation and shall communicate, without cost or delay, and
without publishing the same all available information relating thereto (with all
necessary plans and models) to the Company. I hereby further represent and
acknowledge that any and all such Inventions made, conceived, discovered or
reduced to practice prior to the date hereof, whether or not I am the named
inventor, are owned solely by the Company, and that I have no right, title or
interest therein, and I agree that upon the request of the Company, and without
any compensation to me, I will take such action and execute such documents as
the Company may request to evidence and perfect the Company's ownership of such
Inventions.

I will also promptly disclose to the Company and the Company hereby agrees
to receive all such disclosures in confidence, any other invention,
modification, discovery, design, development, improvement, process, formula,
data, technique, know-how, secret or intellectual property right whatsoever or
any interest therein (whether or not patentable or registrable under copyright
or similar statutes or subject to analogous protection) made, conceived,
discovered, reduced to practice or possessed by me (either alone or with others)
at any time or times during my employment for the purpose of determining whether
they constitute "Inventions," as defined herein.

With respect to all Inventions, I will, at the request and cost of the
Company, sign, execute, make and do all such deeds, documents, acts and things
as the Company and its duly authorized agents may reasonably require:

(a) to apply for, obtain and vest in the name of the Company alone
----
(unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in

2
<PAGE>

any country throughout the world and when so obtained or vested to renew and
restore the same; and

(b) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection.

In the event the Company is unable, after reasonable effort, to secure my
signature on any letters patent, copyright or other analogous protection
relating to an Invention, whether because of my physical or mental incapacity or
for any other reason whatsoever, I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney-in-
fact, to act for and in my behalf and stead to execute and file any such
application or applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent, copyright or other
analogous protection thereon with the same legal force and effect as if executed
by me.

5. I agree that any breach of this Agreement by me could cause
irreparable damage and that in the event of such breach the Company shall have,
in addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent the violation of my obligations
hereunder.

6. I understand that this Agreement does not create an employment
agreement with the Company. The undersigned acknowledges that he is an at-will
employee of the Company.

7. I represent that the inventions and developments identified in the
pages, if any, attached hereto comprise all the inventions and developments
which I have made or conceived prior to my employment by the Company, which
inventions and developments are excluded from this Agreement. I understand that
it is only necessary to list the title of such inventions and developments and
the purpose thereof but not details of the invention or development itself. IF
THERE ARE ANY SUCH INVENTIONS TO BE EXCLUDED, THE UNDERSIGNED SHOULD INITIAL
HERE. OTHERWISE IT WILL BE DEEMED THAT THERE ARE NO SUCH EXCLUSIONS.

I further represent that my performance of all the terms of this Agreement,
and my performance as an employee of the Company, does not and will not breach
any agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written or
oral in conflict herewith.

I further represent that if the representations set forth in the preceding
paragraph are inapplicable, I have attached hereto a copy of each agreement, if
any, which presently affects my compliance with the terms of this Agreement
(such copy specifies the other contracting party or employer, the date of such
agreement, the date of termination of any employment). IF THERE ARE ANY SUCH
AGREEMENTS, THE UNDERSIGNED SHOULD INITIAL

3
<PAGE>

HERE. OTHERWISE IT WILL BE DEEMED THAT THERE ARE NO SUCH AGREEMENTS.

8. Any waiver by the Company of a breach of any provisions of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
hereof.

9. I hereby agree that each provision herein shall be treated as a
separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to scope, duration, territory,
activity or subject so as to be unenforceable at law, such provision or
provisions shall be construed by the appropriate judicial body by limiting and
reducing it or them, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear. In particular, in the event that the
provisions of Section 2 are found to be unenforceable or void (either in whole
or in part) then the offending portion shall be construed as valid and
enforceable only to the extent permitted by law, and the balance of this
Agreement will remain in full force and effect. It is the intention of the
parties to restrict the activities of the undersigned only to the extent
necessary to protect the legitimate business interests of the Company and not to
deprive the undersigned of the right to earn a livelihood. I agree that this
Agreement is reasonably necessary to protect the Company's legitimate business
interests.

10. My obligations under this Agreement shall survive the termination or
cessation of my employment regardless of the manner of such termination or
cessation and shall be binding upon my heirs, executors and administrators.

11. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of North Carolina.

12. The term "Company" shall include Total Ltd., a North Carolina
corporation, and any of its subsidiaries, subdivisions or affiliates. The
Company shall have the right to assign this Agreement to its successors and
assigns, and all covenants and agreements hereunder shall inure to the benefit
of and be enforceable by said successors or assigns.

13. For purposes of this Agreement (other than Section 1), the term
"employment" shall also mean any period of consultancy with the Company.

14. I acknowledge that the execution and delivery of this Agreement is a
condition to the closing of the transactions contemplated by that certain
Investment Agreement, dated as of June 2, 1997, among the Company and the
purchasers named therein (the "Purchasers"). I agree that no amendment,
modification or waiver of any of my obligations under this Agreement shall be
valid unless made in writing and signed by me, the Company and those Purchasers
who hold a majority of the shares of Preferred Stock of the Company held by all
Purchasers.

4
<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
2nd day of June 1997.

TOTAL LTD.

By: /s/ Petra Weishaupt
-----------------------------
Petra Weishaupt, Controller

EMPLOYEE:

/s/ Frank A. Daniels, III
-----------------------------------
Frank A. Daniels, III

<PAGE>

EXHIBIT 10.4

NONCOMPETITION, NONDISCLOSURE AND INVENTIONS AGREEMENT

The undersigned, in consideration of and as a condition of my employment
with Total, Ltd., a North Carolina corporation (the "Company"), does hereby
agree with the Company as follows:

1. During the period of my full time employment by the Company, I will
devote my full time and best efforts to the business of the Company and I agree
that I will not, directly or indirectly, alone or as a partner, officer,
director, employee, consultant, agent, independent contractor or shareholder of
any company or business organization, engage in any business activity which is
directly or indirectly in competition with the products and services being
developed, manufactured, marketed, sold or otherwise provided by the Company or
which is directly or indirectly detrimental to the business of the Company;
provided, however, that the record or beneficial ownership by me of 1 % of less
- -------- -------
of the outstanding publicly traded capital stock of any such company shall not
be deemed to be in violation of this Section 1, provided that I am not an
officer, director or employee of such company.

2. For the shorter of (i) the period of time that the Company continues
paying my base salary in effect prior to such termination or (ii) a period of
two (2) years after the termination or cessation of my employment with the
Company for any reason, I agree that I will not, directly or indirectly, alone
or as a partner, officer, director, employee, consultant, agent, independent
contractor or shareholder of any company or business organization, engage in any
business activity which is directly or indirectly in competition with the
products or services being developed, manufactured, marketed, sold or otherwise
provided by the Company ("Competitive Activity") in any of the following
geographic areas: (1) North Carolina, (2) any state in which the Company is
actively providing services, (3) any state in which the Company is actively
soliciting customers with a view toward providing services, (4) any country in
which the Company is actively providing services and (5) any country in which
the Company is actively soliciting customers with a view toward providing
services. I further agree that, for the shorter of (i) the period of time that
the Company continues paying my base salary in effect prior to such termination
or (ii) a period of two (2) years after the termination or cessation of my
employment with the Company for any reason, I will not in any capacity, either
separately, jointly or in association with others, directly or indirectly,
solicit or contact in connection with, or in furtherance of, a Competitive
Activity any of the Company's employees, consultants, agents, suppliers or
customers with respect to the Company at any time during the one year
immediately preceding the date of my termination of employment or that become
such with respect to the Company at any time during the one year immediately
following the date of my termination. My obligations under this Section 2 shall
survive the termination or cessation of my employment and shall be binding upon
my heirs, executors and administrators.

3. For the purposes of Sections 1 and 2 of this Agreement, a business
shall be deemed to be in competition with the Company only if the products or
services of such
<PAGE>

business are substantially similar in function or capability to the products or
services then being developed, manufactured, marketed, sold or otherwise
provided by the Company.

4. Except as required by law, I will not, whether during or after the
termination or cessation of my employment, reveal to any person, association or
company any of the trade secrets or confidential information concerning the
organization, business or finances of the Company so far as they have come or
may come to my knowledge, except as may be required in the ordinary course of
performing my duties as an employee of the Company or except as may be in the
public domain through no fault of mine or as required to be disclosed by law or
court order, and I shall keep secret all matters entrusted to me and shall not
use or attempt to use any such information in any manner which may injure or
cause loss or may be calculated to injure or cause loss whether directly or
indirectly to the Company.

5. If at any time or times during my employment, I shall (either alone or
with others) make, conceive, discover, reduce to practice or become possessed of
any invention, modification, discovery, design, development, improvement,
process, formula, data, technique, know-how, secret or intellectual property
right whatsoever or any interest therein (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) (herein called "Inventions") that relates to the business of the
Company or any of the products or services being developed, manufactured,
marketed, sold or otherwise provided by the Company or which may conveniently be
used in relation therewith, or results from tasks assigned me by the Company or
results from the use of premises or equipment owned, leased or contracted for by
the Company, such Inventions and the benefits thereof shall immediately become
the sole and absolute property of the Company, and I shall promptly disclose to
the Company (or any persons designated by it) each such Invention and hereby
assign any rights I may have or acquire in the inventions and benefits and/or
rights resulting therefrom to the Company without compensation and shall
communicate, without cost or delay, and without publishing the same all
available information relating thereto (with all necessary plans and models) to
the Company. I hereby further represent and acknowledge that any and all such
Inventions made, conceived, discovered or reduced to practice prior to the date
hereof, whether or not I am the named inventor, are owned solely by the Company,
and that I have no right, title or interest therein, and I agree that upon the
request of the Company, and without any compensation to me, I will take such
action and execute such documents as the Company may request to evidence and
perfect the Company's ownership of such Inventions.

2
<PAGE>

(a) to apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and

6. I agree that any breach of this Agreement by me could cause
irreparable damage and that in the event of such breach the Company shall have,
in addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent the violation of my obligations
hereunder.

7. I understand that this Agreement does not create an employment
agreement with the Company. The undersigned acknowledges that he is an at-will
employee of the Company.

8. I represent that the inventions and developments identified in the
pages, if any, attached hereto comprise all the inventions and developments
which I have made or conceived prior to my employment by the Company, which
inventions and developments are excluded from this Agreement. I understand that
it is only necessary to list the title of such inventions and developments and
the purpose thereof but not details of the invention or development itself. IF
THERE ARE ANY SUCH INVENTIONS TO BE EXCLUDED,

3
<PAGE>

THE UNDERSIGNED SHOULD INITIAL HERE. OTHERWISE IT WILL BE DEEMED THAT THERE ARE
NO SUCH EXCLUSIONS.

9. Any waiver by the Company of a breach of any provisions of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
hereof.

10. I hereby agree that each provision herein shall be treated as a
separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to scope, duration, territory,
activity or subject so as to be unenforceable at law, such provision or
provisions shall be construed by the appropriate judicial body by limiting and
reducing it or them, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear. In particular, in the event that the
provisions of Section 2 are found to be unenforceable or void (either in whole
or in part) then the offending portion shall be construed as valid and
enforceable only to the extent permitted by law, and the balance of this
Agreement will remain in full force and effect. It is the intention of the
parties to restrict the activities of the undersigned only to the extent
necessary to protect the legitimate business interests of the Company and not to
deprive the undersigned of the right to earn a livelihood. I agree that this
Agreement is reasonably necessary to protect the Company's legitimate business
interests.

11. My obligations under this Agreement shall survive the termination or
cessation of my employment regardless of the manner of such termination or
cessation and shall be binding upon my heirs, executors and administrators.

12. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of North Carolina.

13. The term "Company" shall include Total Ltd., a North Carolina
corporation, and any of its subsidiaries, subdivisions or affiliates. The
Company shall have the right to

4
<PAGE>

assign this Agreement to its successors and assigns, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by said
successors or assigns.

14. For purposes of this Agreement (other than Section 1), the term
"employment" shall also mean any period of consultancy with the Company.

15. I acknowledge that the execution and delivery of this Agreement is a
condition to the closing of the transactions contemplated by that certain
Investment Agreement, dated as of June 2, 1997, among the Company and the
purchasers named therein (the "Purchasers"). I agree that no amendment,
modification or waiver of any of my obligations under this Agreement shall be
valid unless made in writing and signed by me, the Company and those Purchasers
who hold a majority of the shares of Preferred Stock of the Company held by all
Purchasers.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
2/nd/ day of June 1997.
- ----

TOTAL LTD.

By: /s/ Frank Daniels III
---------------------------------------
Name: Frank Daniels III
-------------------------------------
Title: CEO
------------------------------------

EMPLOYEE:

/s/ George Schlukbier
------------------------------------------
Printed Name: George Schlukbier
-----------------------------

<PAGE>

Exhibit 23.1

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE

To the Board of Directors and Stockholders of
Total Sports Inc.
Raleigh, North Carolina

We consent to the use in this Registration Statement of Total Sports Inc. on
Form S-1 of our report on the consolidated financial statements of Total Sports
Inc., dated August 1, 1999 (November 12, 1999 as to Note 16), appearing in the
Prospectus, which is a part of this Registration Statement, and to the reference
to us under the heading "Experts" in such Prospectus.

Our audits of the financial statements referred to in our aforementioned report
also included the financial statement schedule of Total Sports Inc., listed in
Item 16. This financial statement schedule is the responsibility of Total
Sports' management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Raleigh, North Carolina

November 12, 1999
<PAGE>

INDEPENDENT AUDITORS' CONSENT

To the Board of Directors and Shareholders of
Total Sports Inc.
Raleigh, North Carolina

We consent to the use in this Registration Statement of Total Sports Inc. on
Form S-1 of our report on the statement of net assets acquired from KOZ inc. as
of March 31, 1997 and the statements of operations and cash flows from
operations of the sports content business acquired from KOZ inc. for the period
May 1, 1996 through March 31, 1997, dated August 2, 1999, appearing in the
Prospectus, which is a part of this Registration Statement, and to the reference
to us under the heading "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP

Raleigh, North Carolina

November 12, 1999
<PAGE>

INDEPENDENT AUDITORS' CONSENT

To the Board of Directors and Shareholders of
Total Sports, Inc.
Raleigh, North Carolina

We consent to the use in this Registration Statement of Total Sports Inc. on
Form S-1 of our report on the financial statements of Long Distance
Technologies, Inc., dated September 8, 1999, appearing in the Prospectus, which
is a part of this Registration Statement, and to the reference to us under the
heading "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP

Raleigh, North Carolina

November 12, 1999