<PAGE>   1

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  20549

                                   FORM 10-K

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
        ACT OF 1934

                    For the fiscal year ended March 31, 1997

                                       OR


[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
        EXCHANGE ACT OF 1934

               For the transition period from         to
                                              -------    -------

                         Commission file number 0-22716

                           BOLLINGER INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)


               DELAWARE                                         75-2502577
   (State or other jurisdiction of                           (I.R.S.  Employer
   incorporation or organization)                            Identification No.)

         602 FOUNTAIN PARKWAY
          GRAND PRAIRIE TEXAS                                      75050
 (Address of principal executive offices)                        (Zip code)

Registrant's telephone number, including area code:          (972) 343-1000

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, 
                                                             $0.01 par value

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    [X]
                    
The aggregate market value of the voting stock held by non-affiliates of the
registrant on June 16, 1997, was $1,439,328.

The number of shares of common stock of the registrant outstanding on June 16,
1997, was 4,000,210.
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<PAGE>   2


                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
ITEM                                                                     PAGE
                                     PART I                            

<S>  <C>                                                                 <C>
 1.  Business..........................................................    1

 2.  Properties........................................................    5

 3.  Legal Proceedings.................................................    6

 4.  Submission of Matters to a Vote of Security Holders...............    7

                                    PART II                            

 5.  Market for Registrant's Common Equity and Related Stockholder     
       Matters.........................................................    8

 6.  Selected Financial Data...........................................    8

 7.  Management's Discussion and Analysis of Financial Condition and 
     Results of Operations.............................................   10

 8.  Financial Statements and Supplementary Data.......................   18

                                    PART III                           

10.  Directors and Executive Officers of the Registrant................   19

11.  Executive Compensation............................................   21

12.  Security Ownership of Certain Beneficial Owners and Management....   22

13.  Certain Relationships and Related Transactions....................   23

                                    PART IV                            

14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K..   25

Signatures.............................................................   S-1

Index to Consolidated Financial Statements and Schedules...............   F-2
</TABLE>                                                               


<PAGE>   3


                                     PART I

ITEM 1. BUSINESS.

     Bollinger Industries, Inc. ("The Company") is a leading domestic supplier
of consumer fitness accessory products. The Company manufactures and
distributes, primarily to mass retailers, an extensive consumer fitness line,
including barbells and dumbbells, aerobic steps and other aerobics products,
trampolines, weightlifting belts and gloves, exercise mats, ankle and wrist
weights, weightlifting bars, waist trimmers, compression shorts, and walking
accessories.

RESULTS OF THE RESTRUCTURING OF OPERATIONS

     In the fourth quarter of fiscal 1996, following a comprehensive review of
the Company's marketing method, operating policies and liquidity,  management
formulated a plan to restructure the Company's operations. The primary elements
of the restructuring plan were to promote the Bollinger brand name,
dramatically reduce inventory levels and improve operating efficiency. (Please
refer to the Company's Form 10K for fiscal 1996 for additional information).

     Since 1993, a significant portion of the Company's fitness accessory
products were sold with the use of celebrity endorsements. These endorsements
carried heavy incremental costs and were subsequently abandoned in favor of the
Bollinger brand. Customer acceptance of this change has been favorable but
sales for fiscal 1997 have been virtually flat as the Company worked through
existing inventory and marketing programs. The Company has introduced a line
of products in striking packaging geared toward the female consumer that is
ready for shipment in early fiscal 1998.

     Inventory has been reduced from $30.1 million in 1996 to $16.2 million in
1997, or a reduction of 46%. Of the approximately $14.0 million reduction,
approximately $8.0 million came from inventory targeted for expedient disposal
in the restructuring plan. The inventory reduction has allowed the Company to
reduce trade payables and debt. There is an additional opportunity for further
reductions of inventory in fiscal 1998.

     Concurrent with the inventory reductions, the Company has consolidated
warehouse operations. This action resulted in the closing of two leased
warehouses, the reduction of the warehouse workforce, and reduction in other
operating costs through enhanced efficiency. In addition, domestic production
of trampolines is in the process of being scaled down and relocated to
corporate headquarters from Georgia. This action, in addition to the lower
inventory levels, will allow the Company to further consolidate operations and
reduce fixed overhead.

     The Company has plans to review all avenues of product sourcing in order 
to significantly reduce product costs, thereby improving gross margin.
Management expects that such cost reductions will be attained during fiscal
1998, but the full annual effect will not be achieved until fiscal 1999.



                                       1


<PAGE>   4


DISCONTINUED OPERATION

     Management determined during the fourth quarter of fiscal 1996 that it
would be in the best interest of the Company to dispose of its Sports Medicine
and Safety Products business, known as Bollinger Healthcare (Healthcare). The
Healthcare business had been unprofitable for the prior two years during which
time sales had declined by 52%. The largest portion of this division was sold
in September, 1996 with the remainder disposed of or abandoned in January 1997.
The manufacturing facility in Lubbock ceased operation in November, 1996.

PRODUCTS AND MARKETS

     Fitness Accessory Products

     The Company manufactures and sells a complete line of more than 250
fitness accessory products, including barbells and dumbbells, aerobic steps and
other aerobics products, trampolines, weightlifting belts and gloves, exercise
mats, ankle and wrist weights, weightlifting bars, waist trimmers, compression
shorts and walking accessories. Other fitness accessory products include
weight sets, supports and support belts, handgrips and jump ropes. The
majority of the Company's fitness accessory products retail for less than $20
but the trampolines retail for $200 to $275.

     In addition to the Bollinger Fitness(TM) trademark, the Company's fitness
accessories are sold under various trademarks to promote consumer
identification and coordinate affiliated products. Weightlifting products
include StarLock(C), SlipLock(TM) and CamLock(C) weightlifting systems, Zoom
Off(C) quick release weightlifting gloves, and BrightBells(C) dumbbells.
Aerobics items include the Step by Step(TM), FlexStep and SoftStep(TM) low
impact aerobic steps, RibMat(TM) exercise mats, TrimRider(TM) aerobic riders,
and NBF(TM) and UltraBounce(TM) trampolines. Solar(TM) trimming products,
Softone(C) wrist weights, and Exergrip(TM) strengthening putty are examples of
other fitness accessory products available through Bollinger.

     In May 1994, as the result of an asset & business acquisition, the Company
began selling NBF(TM) and Ultra Bounce(TM) trampolines through its established
distribution channels for other fitness accessory products. In fiscal 1997,
1996 and 1995, trampoline sales accounted for approximately 40%, 26% and 13%
respectively of the Company's total net sales.

     The Company markets its fitness accessories primarily to mass retailers.
The Company broadly defines mass retailers to include discount chains,
department stores, sporting goods retailers and sports superstores, warehouse
clubs and direct response television. In 1997, 1996, and 1995, the Company
served approximately 500 accounts, although the Company's ten largest fitness
accessory products customers accounted for approximately  88%, 80%,and  77% of
the Company's total net sales. In fiscal 1997 Wal-Mart accounted for 32.2% of
gross sales and KMart accounted for 35.7% of gross sales. Examples of discount
chain customers include Wal-Mart, KMart and Target. Sears is a representative
department store customer. The mass retailer category also encompasses catalog
customers like J.C. Penney and catalog showroom customers such as Service
Merchandise. Sporting goods retailers and sports superstore customers include
chains like Oshman's Sporting Goods, H. Modell & Company, The Sports Authority,
and The Academy. QVC is a shop at home cable television network that provided a
direct response television outlet for Bollinger. Wal-Mart, KMart, J.C. Penney
and Oshman's have been customers of the Company for approximately 20 years. The
loss of one or more of the Company's major customers could have a material
adverse impact on the Company.

                                       2


<PAGE>   5
     Quality is an important element of the Company's merchandising strategy.
To convey the image of quality to the consumer, the Company uses a
merchandising approach that emphasizes quality through easily recognizable
packaging and graphics. The Company's packaging style is uniform, with bright,
coordinating colors. This has enabled it to increase the in-store merchandising
impact of its products and awareness of the Bollinger brand name.

     Bollinger believes it pioneered program marketing of fitness accessories. 
This approach allows the presentation and sales of the products as an integrated
line rather than as stand alone items.  The Company offers program management
services to help retail customers maximize results from the presentation,
merchandising and sale of its products.  Program management assistance includes
helping plan product mix, helping merchandise the product, and responsive
inventory management.  Through the use of distinctive marketing presentations,
and its computerized Plan-O-Gram system, Bollinger is able to customize an
in-store merchandising display for a customer, and quickly illustrate how the
optimum selection of fitness accessory products would fit into a given amount
of shelf space.  Bollinger's ability to provide these program management
services is enhanced by the size and diversity of its extended product line.
The Company continually analyzes and validates its recommendations with product
tracking and store level research.

MANUFACTURING AND PRODUCT SOURCING

     During fiscal 1997, domestic production of fitness accessory items has
been reviewed with the objective of becoming the low cost provider to the
customer and at the same time recovering the gross margin erosion the Company
has experienced in the last two years.  The Company will seek and obtain the
lowest cost product available, while maintaining high quality standards.  These
savings will enable the Company to remain competitive in the market place and
will provide additional gross margin for operations.  The Company is currently
evaluating the cost effectiveness of continuing to manufacture certain of its
product lines.  Approximately 49%, 50%, and 55% of the Company's net sales for
fiscal 1997, 1996 and 1995, respectively, were derived from the sale of
U.S.-made products, the majority of which were manufactured by Bollinger.

     Many of the Company's fitness accessory products are currently
manufactured in a cut-and-sew operation in the Company's Grand Prairie, Texas,
facility. The Company currently manufactures many of its NBFTM trampolines at
its facility in Americus, Georgia.

     The remainder of Bollinger's sales of fitness accessory products,
including barbells, dumbbells, weightlifting bars and weightlifting gloves and
trampolines, are attributable to products imported from China, Taiwan, and
Pakistan.  The Company's imported products are packaged in custom packaging
designed by the Company.  Depending on the particular product, the packaging
materials may be printed overseas and packaging is part of the foreign
manufacturing process. Bollinger's custom packaging differentiate its products
from its competitors.

SALES

     The Company utilizes both a network of independent sales representatives,
and in-house sales management personnel.  In-house management is responsible
for overseeing the independent representatives and for direct sales to major
customers.  The independent sales representatives work on a commission only
basis, and specialize in the sale of sporting goods products to mass retailers.
These independent sales representatives market a variety of sporting goods,
and therefore generally have strong relationships with the trade customers.  
The Company's in house sales management staff, and these independent
representatives, coordinate with Bollinger's marketing department to produce 
a unified marketing and sales effort.

                                       3


<PAGE>   6


     Bollinger's executive officers directly manage the accounts of the largest
customers and focus on the development of new customers.  Two sales managers
are assigned  primary responsibility for all other  customers and the
management of the independent sales representative firms. These sales managers
also have responsibilities in new customer development.  During this past year,
Bollinger has consolidated its sales representation, and brought responsibility
for more accounts in house.  The Company believes this will give it greater
flexibility in handling accounts, and improve net margins in some instances.

     In a growing global economy, the Company is increasing its emphasis on the
development of international sales.  Through its separate International
Division, it works to identify countries with significant population densities
that fit the demographic profile for fitness accessory sales, and to implement
programs which allow the Company to take advantage of its sourcing flexibility,
its merchandising expertise, and the depth of its product line to move into
those markets.  It uses a variety of distributorship and trading partner
arrangements to allow it access to these markets.  Currently, the Company's
products are sold in 40 nations and export sales in fiscal 1997 were
approximately $2.8 million.

PRODUCT DEVELOPMENT

     The Company's product development effort continuously focuses on creating,
obtaining and developing new and innovative products and product ideas.
Similar effort is given to regular reevaluation of existing products and how
they may be repositioned to enhance the Company's competitive position in the
marketplace.  Bollinger also frequently examines many unsolicited product
ideas, but generally does not make any advance commitments to purchase or
license a new product submission.  New products and product ideas may come from
individual inventors, small companies that do not have sufficient manufacturing
capability or the relationships with mass retailers needed to market a new
product or consumers who submit new ideas based on personal experience.  Once
the Company has identified a product, it will determine appropriate sourcing
for the product to attempt to ensure both quality manufacture and low costs.
The Company's product lines currently include more than 250 fitness accessory
products, including several trampoline items.

COMPETITION

     Bollinger participates in a highly competitive industry, competing with a
number of established manufacturers, importers and distributors of fitness
products.  Many competitors have significantly greater financial and other
resources than those available to the Company.  The Company believes that the
principal competitive factors affecting its business include customer service,
manufacturing and distribution capabilities, price, marketing and merchandising
expertise, quality, brand name recognition and the ability to create and
develop a broad variety of innovative products and concepts.

     The Company believes its principal competitors are large fitness equipment
manufacturers, which also sell fitness accessory products, and smaller
importers, which offer a more limited assortment of products than Bollinger or
the larger competitors.  There are relatively few barriers to entry in the
fitness accessory products market.

     The Company believes that one of the largest fitness and exercise
equipment manufacturers is Icon Health & Fitness, Inc. ("Icon"), which markets
products under the brand names of Weslo, Jumpking, Healthrider, Weider and
ProForm.  Icon offers, among many other items, a line of packaged fitness
accessory products similar to Bollinger's fitness accessory products and
backyard trampolines.  Although the Company believes that the majority of Icon's
sales come from treadmills, exercise machines, and weight benches, Icon  

                                      4


<PAGE>   7

competes directly with Bollinger for sales of a large number of handheld fitness
accessories and trampoline products.  The Company believes that Icon has 
larger net sales than the Company.

     RDM Inc., formerly the Roadmaster Company, is another of the largest
fitness equipment and trampoline manufacturers. The Company believes that RDM
Inc. has larger net sales than the Company.

PATENTS AND TRADEMARKS

     The Company has rights to a number of patented inventions, trademarks and
trade names used in connection with the sale and marketing of its products.
The company does not believe it infringes any patent, trademark or trade name
rights.

     The Company currently holds and protects the rights to a number of U.S.
patents and additionally has a number of exclusive and nonexclusive licenses
under various other U.S.  patents.  It does not hold any foreign patents.
Bollinger does not view any single patent as critical to its business and none
of the patents or trademarks expire (without a renewal option) in the next five
years except for the exclusive rights to the name and likeness of Nolan Ryan,
in connection with his endorsement of Bollinger products, which expire in May,
1997.

     Bollinger owns a number of trademarks and has licensed the use of
additional trademarks in the U.S.  The Company intends to protect them to the
fullest extent practicable.  Bollinger has registered its trademark in a number
of foreign countries.

EMPLOYEES

     As of March 31, 1997, the Company employed approximately 350 persons on a
full-time basis, of which approximately 290 employees were engaged in
receiving, manufacturing, warehousing, and shipping activities.  Approximately
60 employees were engaged in sales, customer service, accounting, MIS, and
other administrative functions.  In addition, the Company, from time to time,
uses part-time workers and/or contract labor.  None of the Company's employees
are represented by a union.  The Company believes relations with its employees
are good.

REGULATIONS

     The Company and its products are subject to numerous federal, state, and
local laws, rules and regulations ("Regulations").  Among the more significant
of such Regulations are consumer product safety laws under which a company's
products can be barred from sale or subject to recall if found to be hazardous;
occupational safety and health laws; and environmental laws.

     The Company is not a party to any threatened or pending material
regulatory action, other than as discussed below in Item 3. Legal Proceedings.

ITEM 2.   PROPERTIES.

     The Company leases approximately 402,000 square feet in Grand Prairie,
Texas, which is currently used as the Corporate offices  and houses its
accounting and sales effort as well as serving as the main manufacturing,
warehousing, and shipping facility.  One lease for approximately 102,000 square
feet expires June 30, 1999, and has a renewal option for an additional four
years.  The other lease for approximately 300,000 square feet expires May 1,
2004, and contains a renewal option to extend the lease an additional three
years.                       

                                       5


<PAGE>   8




     The Company also manufactures, warehouses, and ships trampolines out of a
facility in Americus, Georgia, which contains approximately 60,000 square feet.
The lease for this location expires on December 20, 2005, at which time the
Company is obligated to purchase the facility for a nominal amount.

     The Company owns a facility in Irving, Texas, which contains approximately
43,000 square feet.  This facility, which held the Company's corporate offices,
has been placed on the market for sale.

     The Company intends to consolidate all operations to the Grand Prairie
facility and to reduce the Company's space requirements to allow relinquishing
or sub-leasing a significant portion of this location. 

ITEM 3.  LEGAL PROCEEDINGS.

     The Company, Glenn D. Bollinger (Chairman & CEO), Bobby D. Bollinger
(President), Curtis D. Logan (former CFO), Michael J. Beck (former CAO), John
L. Maguire (Director), William Blair & Company, Rauscher Pierce Refnes, Inc.
(former underwriters of initial public offering), and Grant Thornton, L.L.P.
(former independent accountants), are defendants (the "Suntrust Defendants") in
a suit brought in the District Courts, Dallas County, Texas, by shareholder
Suntrust Bank Atlanta, as trustee for Suntrust Retirement Sunbelt Equity Fund,
on behalf of themselves and all persons similarly situated.  In addition, the
Company, Glenn D. Bollinger, Bobby D. Bollinger, Curtis D. Logan, and Michael
J. Beck, are defendants (the "STI Defendants"), in a lawsuit brought in the
United States District Court for the Northern District of Texas, Dallas
Division, by shareholders STI Classic Fund and STI Classic Sunbelt, on behalf
of themselves and all persons similarly situated.  The lawsuits purport to be
class actions and allege certain misrepresentations and fraudulent actions by
the Suntrust and STI Defendants.  Both lawsuits seek damages, exemplary
damages, interest, costs, and expenses.  Management of the Company does not
believe either lawsuit has merit.  However, if the plaintiffs should prevail in
either lawsuit, it could have a material adverse effect on the Company.

     The Company has been contacted by the Department of Labor (DOL) in regard
to certain questions about its former Employee Stock Ownership Plan (the
"ESOP").  Assets of the ESOP are held in the Company's 401(K) plan which is the
successor to the ESOP.  The Company has responded to and cooperated with the
DOL.  The DOL has not initiated any proceeding with respect to the ESOP or any
other of the Company's employee benefit plans.

     On September 24, 1996, the United States Securities and Exchange
Commission filed a Civil Injunctive Action in the United States Court for the
District of Columbia naming Bollinger Industries, Inc., Glenn Bollinger and
Ronald Bollinger, Cause No. 96-2257.  The Company consented to the entry of an
order of permanent injunction which directs the Company to comply with the
Securities and Exchange Act of 1934 in the future in the conduct of its
business.  Glenn Bollinger and Ronald Bollinger also consented to the entry of
orders of permanent injunction which enjoins them from future violations of the
provisions of the Securities Exchange Act of 1934. and in addition, Glenn
Bollinger agreed to the payment of a monetary penalty in the amount of $40,000. 
Ronald Bollinger also agreed to a bar from holding office as an officer or
director of a publicly-held company.

     The Company filed a lawsuit against Denise Austin on December 2, 1996 in
the 162nd District Court of Dallas County, Texas and was subsequently removed
to the United States District Court for the Northern

                                       6

<PAGE>   9

District of Texas, Dallas Division Case Number 3-97-CV-0246-G on February 6,
1997. Subsequently a suit was filed on December 30, 1996, by Denise Austin in
the United States District Court, Eastern District of Virginia. The suit was
filed for payment of royalties alleged to be due of approximately $655,000.  The
Company has filed counter claims in excess of such amount.

     From time to time, the Company is a party to various legal proceedings
arising in the ordinary course of business.  The Company is not currently a
party to any other material litigation and is not aware of any litigation
threatened against the Company, arising in the ordinary course of business,
that could have a material adverse effect on the Company.

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

     The Company held its Annual Meeting of Stockholders on  November 7, 1996.
During this meeting, five directors, which constitutes the entire Board of
Directors, were elected to serve until the next Annual Meeting of Stockholders
or until their successors are elected and qualified.  The following individuals
were elected:


<TABLE>
<CAPTION>
                            VOTING SUMMARY
                    -------------------------------
<S>                 <C>        <C>       <C>
       NAME            FOR     WITHHELD  NOT VOTING
------------------  ---------  --------  ----------
Glenn D. Bollinger  3,737,336   66,834    196,040
Bobby D. Bollinger  3,736,736   67,434    196,040
John L. Maguire     3,738,536   65,634    196,040
Stephen L. Parr     3,738,536   65,634    196,040
Richard J. Tucker   3,738,536   65,634    196,040
</TABLE>                      

King Griffin & Adamson P.C. were appointed as the Company's auditors for fiscal
1997.

                                       7


<PAGE>   10


                                    PART II


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

     The Company completed its initial offering during November 1993 at a price
of $12.50 per share.  The Common Stock was quoted on the NASDAQ National Market
under the trading symbol "BOLL."   However, due to delinquency in filing
certain reports with the Securities and Exchange Commission, and other matters,
the NASDAQ "delisted" the Company's common stock during August 1995.  The
Company's common stock is currently traded over-the-counter.  The following
table sets forth, on a per share basis for the periods indicated, the high and
low closing sale prices for the Common Stock as reported by NASDAQ for the
period April 1, 1995 through August 16, 1995 and a market maker of the
Company's common stock or the over-the-counter Bulletin Board for the period
from August 17, 1995 through March 31, 1997.



<TABLE>
<CAPTION>
                                      PRICE RANGE             
                           ---------------------------------  
                             FISCAL 1997      FISCAL 1996     
                           ---------------  ----------------  
                            HIGH     LOW     HIGH      LOW    
                           ------  -------  -------  -------  
<S>                        <C>     <C>      <C>      <C>      
First Quarter............  $3.00    $1.25    $9.00    $1.87   
Second Quarter...........   2.37     1.31     4.25     3.00   
Third Quarter............   1.69      .56     4.00     2.31   
Fourth Quarter...........   1.00      .56     4.00     2.00   
</TABLE>

     On June 16, 1997, the closing sale price of the Common Stock as reported
by the over-the-counter Bulletin Board was $.9375 per share.  As of June 16,
1997, there were approximately 54 holders of record of the Common Stock.

     The Company has not paid cash dividends on its Common Stock since its
inception.  The Company's board of directors does not anticipate payment of any
cash dividends by the Company in the foreseeable future.

ITEM 6. SELECTED FINANCIAL DATA.

     The selected historical financial data presented below is derived from the
consolidated financial statements of the Company.  The consolidated financial
data of the Company for the  years ended March 31, 1993 and 1994, is derived
from the historical consolidated financial statements of the Company, which
have been audited by Grant Thornton, L.L.P., independent certified public
accountants.  (The Company's historical consolidated financial statements for
the years ended March 31, 1993, and 1994 are not included in this Report.)  The
consolidated financial data for the years ended March 31, 1995, 1996 and 1997,
are derived from the historical consolidated financial statements of the
Company, which have been audited by King Griffin & Adamson P.C (successor to
King Burns & Company P.C.).  The selected financial data should be read in
conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and with the Company's consolidated financial
statements and related notes included elsewhere in this Report.


                                       8


<PAGE>   11

<TABLE>
<CAPTION>
                                                                               FISCAL YEAR ENDED MARCH 31,
                                                           ------------------------------------------------------------------
                                                            1997           1996           1995           1994           1993
                                                           -------        -------        -------        -------       ------- 
                                                                         (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                        <C>            <C>            <C>            <C>           <C>
STATEMENT OF OPERATIONS (3)
Net Sales.............................................     $82,599        $80,300        $67,894        $38,746       $27,586 
Cost of goods sold....................................      69,723         62,197         50,546         26,982        20,060 
                                                           -------        -------        -------        -------       ------- 
    Gross profit......................................      12,876         18,103         17,348         11,764         7,526 

Selling expenses......................................       6,879          7,877          6,862          4,070         2,282 
Distribution, general and administrative expenses.....      11,506         12,115          8,422          4,224         3,331 
Restructuring of operations...........................           -          3,960              -              -             - 
                                                           -------        -------        -------        -------       ------- 
                                                            18,385         23,952         15,284          8,294         5,613 
                                                           -------        -------        -------        -------       ------- 
    Operating profit (loss)...........................      (5,509)        (5,849)         2,064          3,470         1,913 
Other expense (income)                                                                                                 
  Interest expense....................................       2,552          2,252          1,167            667           320 
  Other...............................................         (50)          (105)           (47)           (65)          (47)
                                                           -------        -------        -------        -------       -------
                                                             2,502          2,147          1,120            602           273 
                                                           -------        -------        -------        -------       ------- 
  Earnings (loss) from continuing operations                                                                           
      before income tax expense (benefit).............      (8,011)        (7,996)          944           2,868         1,640

Income tax expense (benefit)..........................         (92)        (1,135)           350          1,042           685 
                                                           -------        -------        -------        -------       ------- 
  Earnings (loss) from continuing operations (1)......      (7,919)        (6,861)           594          1,826           955 

Discontinued operations...............................                                                                        
  Earnings (loss) from operations net of income                                                                        
      tax benefit.....................................           -           (592)          (525)           550           235 
  Gain (loss) on disposal, net of income tax                                                                           
      benefit including a $1,199,118 and $325,380                                                                          
      provision for operating losses during phase                                                                          
      out period in 1996 and 1994.....................         478           (770)             -           (573)            - 
                                                           -------        -------        -------        -------       -------
Earnings (loss) from discontinued operations(2).......         478         (1,362)          (525)           (23)          235 
                                                           -------        -------        -------        -------       -------
Net earnings (loss)...................................     $(7,441)       $(8,223)       $    69        $ 1,803       $ 1,190 
                                                           =======        =======        =======        =======       ======= 
Per share data:                                                                                                        
  Earnings (loss) from continuing operations..........     $ (2.04)       $ (1.85)       $  0.15        $  0.59       $  0.36 
                                                           =======        =======        =======        =======       ======= 

  Net earnings (loss).................................     $ (1.86)       $ (2.22)       $  0.02        $  0.59       $  0.45 
                                                           =======        =======        =======        =======       ======= 
Weighted average common and common equivalent                                                                          
  shares outstanding..................................       4,000          3,710          3,967          3,079         2,650 
                                                           =======        =======        =======        =======       ======= 
</TABLE>     


                                       9
<PAGE>   12




<TABLE>
<CAPTION>
                                                   MARCH 31,
                            -------------------------------------------------------
                              1997        1996        1995        1994        1993
                            -------     -------     -------     -------     -------
<S>                        <C>           <C>          <C>         <C>        <C>
BALANCE SHEET DATA                                                       
Working capital........     $15,994     $ 8,322     $15,725     $18,038     $ 3,484
Total assets...........      38,389      58,381      55,422      27,632      20,663
Total long term debt...      15,642         577         223         500         690
Total debt.............      18,483      23,260      26,810       4,977       9,701
Stockholders' equity...       5,021      12,463      20,467      19,398       4,369
</TABLE>

(1)  The Company sold substantially all of the assets of its C. G. Products
     subsidiary effective September 13, 1993.  The Company sold substantially
     all of the assets of the Healthcare Division during September 1996.
     Earnings from continuing operations does not reflect the results of
     operations for C. G. Products and the Healthcare Division.  See
     Management's Discussion and Analysis of Financial Condition and Results of
     Operations and Note C of "Notes to Consolidated Financial Statements."
(2)  Represents results of discontinued operations of C. G. Products and the
     Healthcare Division.  See Management's Discussion and Analysis of
     Financial Condition and Results of Operations and Note C of "Notes to
     Consolidated Financial Statements."
(3)  The Statements of Operations for fiscal 1995, 1994, and 1993 have been
     reclassified to reflect the discontinuance of the Healthcare operation.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following discussion should be read in conjunction with the
consolidated financial statements and related notes thereto appearing elsewhere
in this Report.

GENERAL

     Bollinger Industries, Inc. designs, manufactures, imports, and distributes
a variety of fitness equipment and accessories.

     During the fourth quarter of fiscal 1996, management undertook a
comprehensive review of the Company's marketing strategy, profitability and
liquidity. This strategy necessitated a three point plan (refer to Form 10-K 
for fiscal 1996).

     The components of the plan comprised: providing a restructuring charge to
cover disposal of certain inventory and phase out of certain celebrity endorsed
products: disposal of the Company's Sports Medicine and Safety Products
business ("Healthcare Division"), and revision of certain operating policies
and procedures.

RESTRUCTURING OF OPERATIONS

     The significant elements of the Restructuring Plan were to substantially
reduce inventory levels, which had been excessive in prior years,  and to
de-emphasize celebrity endorsed products.  The Company expected to reduce
interest costs, generate much needed capital, reduce warehousing and related
costs, reduce royalty expense, improve gross profit, and increase net earnings
per share.

                                       10
<PAGE>   13



     Inventory levels have decreased substantially from $30.1 million in 1996
to $16.2 million in 1997 and inventory originally targeted for expedient
disposal has been reduced from approximately $12.0 million in 1996 to
approximately $4.0 million in 1997.  This reduction in inventory has allowed
the Company to consolidate operations,  relocate its Corporate Offices,  and
reduce both short term and long term debt.

     The Company did not experience the improved gross profit  and related
increase in net earnings per share from this restructuring due to a decline in
the overall sales level of fitness accessory products and to a change in
product mix from higher margined light equipment items to lower margined
backyard trampolines.


DISCONTINUED OPERATIONS-HEALTHCARE DIVISION

     Management of the Company determined in January of fiscal 1996 that it
would be in the best interest of the Company to dispose of its Sports Medicine
and Safety Products business, known as Bollinger Healthcare.  The largest
portion of this division was sold in September, 1996 with the remainder
disposed of or abandoned in January 1997.  The Company recorded a one time gain
in relation to this sale of $477,000 net of income tax expense of $246,000.

PROFITABILITY

     The Company has experienced several areas of improvement, due to the
implementation of the Restructuring Plan, but there are many areas that  need
to be addressed in fiscal 1998 for the Company to return to profitability.

     NET SALES:  The Company has suffered with Customer returns and allowances
over the last 2 1/2 years but is beginning to see an improvement in the number
and dollar amount of these returns and deductions.  The controls surrounding the
prompt handling of returns has been improved and the response time and tracking
of these returns and related deductions has improved substantially. Customer
deductions from payments improved approximately $3.0 million dollars from
fiscal 1996 to 1997 but the Company believes even more progress can be made in
this area, the effect of which is a higher net sales dollar and improved gross
margin.

     COST OF SALES:  During the year, as inventory was sold and warehouses
consolidated, the Company saw improvements in the fixed costs associated with
warehousing and storing  goods, but these improvements were not enough to
counteract the deteriorating margins due to freight demurrage charges,
scrapping of many of the returns from previous periods that were not cost
effective to repair, and the cost of contract labor to handle the start up  of
trampoline production in the Grand Prairie facility.

     The Company is currently in the process of examining the need to maintain
domestic production of several line items.  Due to the  highly competitive
nature of the overseas market it has become cost advantageous to source more
items from overseas.  Additionally, there are potential savings to be
negotiated with steamship lines, freight forwarders and U.S. Customs as well as
major reductions in product costs previously referred to Part I, Item 1, of
this form 10-K.

     GROSS MARGIN:  The Company experienced a down turn in sales of the Fitness
Accessory line (excluding trampolines) in fiscal 1997, primarily due to the
ebbing popularity of the light equipment items such as Trimriders(TM) and
Powerriders(TM), many of which were celebrity endorsed. These items
traditionally carried a higher margin than the majority of the Fitness
Accessory line because they were sold through the televised shopping clubs.
Additionally, $5.0 million dollars of sales on the targeted inventory were at a
9% gross margin, causing an overall erosion of margin of one half of a 
percentage point for the year. Historically 

                                       11
<PAGE>   14

there has been an 11% deferential between the gross margin on Fitness items and
trampolines.  The Company experienced a sales shift of $12.8 million from
accessories to trampolines.  This had a negative gross margin effect, on a
consolidated basis, of two percentage points for the year.

     The Company believes that sourcing their products from the lowest cost,
high quality provider, in addition to strengthening the controls and response
time surrounding customer deductions, will enable it to substantially improve
gross margins in fiscal 1998.

     WAREHOUSING EXPENSES:  The Company plans to continue to consolidate
warehouse facilities in fiscal 1998 thereby lowering fixed costs.  The Company
is also exploring the use of freight expediters on the west coast to receive the
product from the orient, unload and inspect it, and repack it for shipment to
the customer.  Using the west coast facilities, as opposed to the Grand Prairie
operation, should save additional manpower and freight.  Other improvements
include establishing more rigid quality standards for our imported products to
pass back to the supplier the cost of repackaging items with incorrect or faulty
labeling, resorting items grouped by the wrong size or color, etc.  The Company
has, in the past, absorbed these costs as part of its operating expenses.

     SELLING, GENERAL AND ADMINISTRATIVE:  Selling, General and Administrative
expenses have continued to decline as Company management is constantly
challenged to find innovative ways to produce results with limited funds.
Staffing levels are monitored closely and expenses continue to be scrutinized.

     FINANCING:  The Company experienced an increase in the cost of financing
from fiscal 1996 to 1997 of $300,000 primarily due to higher interest paid in 
the first two quarters.

ACQUISITIONS

     Effective May 24, 1994, the Company, through a newly formed and wholly
owned subsidiary, NBF, Inc., a Georgia Corporation, acquired substantially all
the assets, liabilities and business of NBF, Inc., a Florida Corporation, in
exchange for 138,000 shares of the Company's restricted Common Stock.  The
purchase price was approximately $2.8 million, including the assumption of
certain liabilities.  Additionally, the Company acquired from an individual all
of the intellectual property rights to the products manufactured by NBF, Inc.,
a Florida Corporation, for $150,000 in cash.  NBF, Inc. is a manufacturer of
trampolines and other outdoor playground equipment.  The acquisition was
accounted for as a purchase and accordingly, results of operations have been
included in the Consolidated Statement of Earnings since the acquisition date.

SALE OF ASSETS

     In September of 1996, the Company sold substantially all of the assets of
its Healthcare Division.  The Healthcare division supplied sports medicine and
safety products to the medical markets.  The Company realized a net gain from
the sale of this division of $477,000 net of income tax expense of $246,000.  
The results of operations of the Healthcare Division are reflected in the 
Company's consolidated financial statements as discontinued operations.


                                       12
<PAGE>   15


RESULTS OF OPERATIONS

     The following table presents for the periods indicated, certain items
derived from the Company's consolidated statements of operations expressed as a
percentage of net sales.  The trends in sales or earnings illustrated in the
following table may not be indicative of future results.


<TABLE>
<CAPTION>
                                                                  PERCENTAGE INCREASE
                                   PERCENTAGE OF NET SALES            (DECREASE)
                                ------------------------------  ------------------------
                                 FISCAL YEAR ENDED MARCH 31,      FISCAL       FISCAL    
                                                                   1997         1996
                                                                      OVER FISCAL
                                  1997       1996       1995        1996         1995
                                --------   --------   --------  -----------  -----------
<S>                              <C>        <C>        <C>        <C>          <C>
Net sales......................   100.0      100.0      100.0        3           18
Cost of goods sold.............    84.4       77.5       74.4       12           23
                                -------    -------    -------
  Gross profit.................    15.6       22.5       25.6      (29)          (4)
                                                      
Selling expenses...............     8.4        9.8       10.1      (13)         (15)
Distribution, general and                             
  administrative expenses......    13.9       15.1       12.4       (5)          44
Restructuring of operations....     0.0        4.9        0.0      (100)          0
                                -------    -------    -------
                                   22.3       29.8       22.5      (23)          57
                                -------    -------    -------
  Operating profit (loss)......    (6.7)      (7.3)       3.0       (6)         (383)
                                                      
Interest expense...............     3.1        2.8        1.7       13           93
Other expense (income) - net...    (0.1)      (0.1)      (0.1)     (52)         (78)
                                -------    -------    -------
                                    3.0        2.7        1.6       16           92
Earnings (loss) from                                  
  continuing operations                               
  before income taxes..........    (9.7)     (10.0)       1.4        0          (947)
                                                      
Income tax expense (benefit)...     0.0       (1.4)        .5       114         (424)
                                -------    -------    -------
  Earnings (loss) from                                
  continuing operations........    (9.7)      (8.5)        .9      (19)        (1,255)
                                =======    =======    =======
</TABLE>

(1)  The percentages for 1995 have been recalculated to reflect the
     discontinuance of the Healthcare Division.  See Management's Discussion of
     Financial Condition and Results of Operations and Note C to "Notes to
     Consolidated Financial Statements."


FISCAL YEAR ENDED MARCH 31, 1997 COMPARED TO FISCAL YEAR ENDED MARCH 31, 1996

     The Company's fitness accessory products (Fitness Accessory Products)
consist of two major product categories - trampoline products (Trampoline
Products) and other fitness accessory products (Other Fitness Accessory
Products).

     Net sales of Fitness Accessory Products  in fiscal 1997 increased  by
approximately $2.3 million from fiscal 1996, an increase of 2.9%.
Approximately  $12.8 million of this growth is attributable to  net sales of
Trampoline Products which increased 62.2%.  The reduction of approximately
$10.5 million  is attributable to net sales of Other Fitness Accessory
products, which decreased 17.6%.  The Company introduced Trampoline Products to
its Fitness Accessory Product line during May 1994.  Since that time net sales
of Trampoline Products has increased rapidly due to placement of trampolines at
several of the Company's high volume mass merchant customers.  The Company
expects net sales of Trampoline Products will continue to grow at a high rate.
However, it is unlikely that the prior year percentage increase in net sales
can be maintained.  The decrease in  net sales of Other Fitness Accessory
Products resulted from a continuing trend of a slow down of purchases of the 
Company's light equipment items.

                                       13
<PAGE>   16

     In fiscal 1995 and 1996 the Company had experienced a high rate of product
returns and customer chargebacks. The Company's method for recording and
analyzing chargebacks, including returned merchandise deductions, has improved
substantially over the last 2 1/2 years.  The Company has developed internal
procedures for receiving and reworking product returns as they arrive in the
warehouse, increased the number and talent of the accounts receivable staff, and
included a full review of customer deductions and payment practices in the
management review process.

     Returns and deductions from customers was reduced in fiscal 1997 from a
high of approximately 11% of sales in the first quarter to approximately 6% by
year end.

     Gross profit for Fitness Accessory Products in fiscal 1997 decreased by
approximately $5.2 million  over fiscal 1996, and decreased as a percentage of
net sales from 22.5% in 1996 to 15.6% in fiscal 1997.  This is due, in part,
to trampoline products earning a lower gross margin than other Fitness Products
and comprising a higher proportion of sales in 1997.  Gross margins of the
other Fitness Accessory Products were lower in 1997 than 1996 due primarily to
the sales of $5 million  of targeted inventory at a gross margin of 9% and the
loss of the light equipment sales which carry higher gross margin percentage
that other fitness accessories. Management expects the impact of selling
targeted inventory will be less in fiscal 1998. 

     Selling expenses for Fitness Accessory Products in fiscal 1997 decreased
by approximately $1.0 million compared to fiscal 1996 and decreased as a
percentage of net sales of Fitness Accessory Products from 9.8% in fiscal 1996
to 8.3% in fiscal 1997.  The dollar decrease and percentage decrease in selling
expenses is attributed to the decrease in celebrity commissions, sales
commissions and royalties, as a result of discontinuing celebrity endorsements,
which will continue in fiscal 1998.

     Distribution, general and administrative expenses for Fitness Accessory
Products decreased by $600,000 compared to fiscal 1996 and decreased as a
percentage of net sales of Fitness Accessory Products from 15.1% in fiscal 1996
to 13.9% in fiscal 1997.  The decrease in distribution, general and
administrative expenses in dollars is attributed to the reduction of excess
warehouse rent and labor costs.  In addition, distribution, general and
administrative expenses were lower than previous year due to a decrease in the
use of temporary employees in the office, and better cost controls.

     Operating loss from continuing operations in fiscal 1997 as compared to
fiscal 1996 decreased by $300,000.  As a percentage of net sales, operating
losses decreased from a 7.3% operating loss in 1996 to a 6.7% operating loss in
fiscal 1997.

     Interest expense for continuing operations in fiscal 1997 increased
approximately $300,000 from fiscal 1996 primarily due to fees associated with
obtaining alternative financing.  The average loan balance was lower in fiscal
1997 due to substantially lower inventory levels and decreases in accounts
payable.  Interest rates improved from 11.75% to 10.0% in fiscal 1997.

FISCAL YEAR ENDED MARCH 31 1996 COMPARED TO FISCAL YEAR ENDED MARCH 31,1995

     Net sales of Fitness Accessory Products in fiscal 1996 increased by
approximately $12.4 million from fiscal 1995, an increase of 18.3%
Approximately  $11.5 million of this growth is attributable to net sales of
Trampoline Products which increased 127.9%.  The balance of approximately
$900,000 is attributable to net sales of Other Fitness Accessory products,
which increased 1.4%.  The relatively flat net

                                       14
<PAGE>   17

sales of Other Fitness Accessory Products resulted from weak demand and a high
level of product returns.  The high returns were a result of both defective
product and accommodations to certain of the Company's larger customers.
Returns and other customer deductions were particularly high in the fourth
quarter of fiscal 1996.

     Gross profit for Fitness Accessory Products in fiscal 1996 increased by
approximately $800,000 over fiscal 1995, but decreased as a percentage of net
sales from 25.6% in 1995 to 22.5% in fiscal 1996.  This is due to the fact that
trampoline products earn a lower gross margin than other Fitness Products and
were a higher proportion of sales in 1996.  Gross margins of the other Fitness
Accessory Products were lower in 1996 than 1995 due primarily to a higher level
of customer returns and chargebacks.

     Selling expenses for Fitness Accessory Products in fiscal 1996 increased
by approximately $1.0 million compared to fiscal 1995 and decreased as a
percentage of net sales of Fitness Accessory Products from 10.1% in fiscal 1995
to 9.8% in fiscal 1996.  The dollar increase in selling expenses is attributed
to the overall increase in net sales of Fitness Accessory Products.  The
decrease in selling expenses as a percentage of net sales of Fitness Accessory
Products is attributable to increased sales volume.

     Distribution, general and administrative expenses for Fitness Accessory
Products increased by $3.7 million compared to fiscal 1995 and increased as a
percentage of net sales of Fitness Accessory Products from 12.4% in fiscal 1995
to 15.1% in fiscal 1996.  The increase in distribution, general and
administrative expenses in dollars is attributed to the increase in net sales;
excessive warehouse rent and labor costs associated with product returns.  In
addition, distribution, general and administrative expenses were higher than
anticipated due to increased consulting and temporary employee expenses to
address problems with the Company's computer system; increased legal expenses
and audit fees; expenses associated with taking extra physical inventories; and
certain other expenses.

     In particular, the fourth quarter of fiscal 1996 was impacted by 
significant temporary storage charges associated with in-transit inventory, 
legal expenses, and insurance costs associated with product liability.

     Operating profit from continuing operations in fiscal 1996 as compared to
fiscal 1995 decreased by $7.9 million including a restructuring charge of $4.0
million.  As a percentage of net sales, operating profit decreased from a 3.0%
operating profit to a 7.3% operating loss.

     Interest expense for continuing operations in fiscal 1996 increased
approximately $1.0 million from fiscal 1995 primarily due to a higher interest
rate on the Company's borrowings.  In addition, the average loan balance was
higher in fiscal 1996 due to increased working capital required to support
increased sales volume partially offset by higher accounts payable.

     Due to a loss from continuing operations the Company recorded an income
tax benefit of $1.0 million which is based on an effective tax rate of 14.2%.
The tax benefit was reduced to reflect the amount expected to be realized.

SEASONALITY; QUARTERLY RESULTS

     In the past, the Company's net sales and earnings have been higher in the
last six months of the fiscal year compared to the first six months of the
fiscal year.  This trend has been mitigated by the seasonality of trampoline
sales which tend to be higher in the spring and Christmas selling seasons.  Net
earnings for the Company will generally rise and fall with sales volume
although not directly in proportion to the change in net sales due to certain
of the Company's expenses being relatively fixed while others are variable.  
The 

                                       15
<PAGE>   18

Company's quarterly operating results may also vary depending on such other
factors as the timing of significant customer orders, the mix of products sold,
and the efficiency of operations.

     The following table sets forth selected quarterly unaudited information
for the 1997, 1996, and 1995 fiscal years.  In the opinion of the Company, such
information reflects all adjustments, consisting only of normal recurring
adjustments necessary to present fairly the information set forth below.  The
operating results for any quarter are not necessarily indicative of the results
for any future period.


<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED              
                                        FISCAL 1997                                FISCAL 1996              
                       ----------------------------------------  -----------------------------------------  
                        JUNE 30,  SEPT. 29,  DEC. 29,  MAR. 31,   JUNE 30,   SEPT. 30,  DEC. 31,  MAR. 31,  
                          1996      1996       1996      1997       1995       1995       1995      1996    
                       ---------  ---------  --------  --------  ----------  ---------  --------  --------  
<S>                    <C>        <C>        <C>       <C>         <C>        <C>        <C>       <C>      
Net Sales.............  $22,434    $19,093   $24,609   $16,463     $12,762    $21,489    $31,648   $14,401  
                                                                                                            
Operating Profit                                                                                            
  (loss)..............     (124)      (440)   (1,300)   (3,645)       (748)     1,434      1,683    (8,218) 
Earnings (loss)                                                                                             
  from continuing                                                                                           
  operations..........     (765)    (1,074)   (2,017)   (4,308)       (703)       694        701    (7,553) 
Earnings (loss) per                                                                                         
  share from                                                                                                
  continuing                                                                                                
  operations..........    (0.19)     (0.27)    (0.50)    (1.08)      (0.19)      0.18       0.18     (2.03) 
                                                                                                            
<CAPTION>             
                                         FISCAL 1995
                       -----------------------------------------
                        JUNE 30,   SEPT. 30,  DEC. 31,  MAR. 31,
                          1994       1994       1994      1995
                       ----------  ---------  --------  --------
<S>                     <C>          <C>       <C>      <C>
Net Sales.............   $12,760    $16,245   $23,256   $15,633
Operating Profit        
  (loss)..............       953        898     1,569    (1,355)
Earnings (loss)         
  from continuing       
  operations..........       572        465       744    (1,187)
Earnings (loss) per     
  share from            
  continuing            
  operations..........      0.15       0.12      0.19     (0.32)

</TABLE>

     The above table for Fiscal 1995 has been reclassified to retroactively
recognize the discontinued Healthcare Division.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal sources of financing in the past several years
have been short-term borrowings from banks, asset based lenders and an IPO.
The Company's cash flow from operations was approximately $5.0 million for
fiscal 1997 and approximately $4.0 million in fiscal 1996.  The improvement in
cash flow from operations is due primarily to the sell down of inventory, the
collection of an income tax refund and the collection of receivables offset by
a decrease in trade payables and continuing losses.

     In fiscal 1997 the Company successfully secured a revolving credit
facility with a financial institution providing a maximum line of credit of
$25.0 million, subject to certain borrowing  base requirements and covenants. 
As of March 31, 1997 the outstanding balance was $15.5 million.  This facility
matures August 16, 2000.  As of March 31, 1997  the Company was in default or
out of compliance with certain of the covenants or other provisions of the
Credit Line.  The financial institution has agreed to forebear exercising  any
of its rights and remedies regarding these defaults or non compliance items
through year end and has restated the financial covenants for the periods
covering fiscal 1998, 1999, and beyond. The Company is currently in compliance
with the new terms and covenants.
                        
     The outstanding balance under the Credit Line is collateralized by
substantially all of the Company's assets including accounts receivable,
inventory and real estate.  The Company also has  a note payable to a bank of
$1.7 million which is collateralized by a building in Irving, Texas.

     From April 1, 1996 to August 16, 1996 the outstanding balances under the
previous credit facility bore interest at the bank's prime interest plus 3% or
approximately 11.75%.  The new credit facility, as acquired August 16, 1996,
bore interest at the rate of 10.00% through March 26, 1997, at which time it
increased to 10.25%.

                                       16
<PAGE>   19



     The Company expects to be able to raise funds from operations, the
additional sell down of inventory and the collection of accounts receivable.
Improved liquidity is crucial to the future success and growth of the Company.
There is no guarantee the Company will be successful in raising adequate funds
from any of these sources and the failure to raise adequate funds from any of
these sources and failure to raise adequate alternative and additional funds
will have a materially adverse effect on the Company.

     Capital expenditures during fiscal 1997 were approximately $621,000.  The
Company has budgeted approximately $250,000 for capital expenditures for fiscal
1998.

INFLATION AND FOREIGN CURRENCY FLUCTUATIONS

     To date, inflation and foreign currency fluctuations have not had a
material impact on the Company's operations. There can be no assurance,
however, that future inflation or foreign currency fluctuations will not have a
material adverse effect on the Company, or that the Company will be able to
pass on resulting cost increases without experiencing a reduction in demand for
its products. A substantial portion of the Company's existing indebtedness
bears, and future indebtedness may bear, interest that fluctuates with the
prime rate.

FACTORS THAT COULD AFFECT FUTURE PERFORMANCE

     Certain statements contained in this Annual Report on Form 10-K, including
without limitation, statements containing the words "believes", "anticipates",
"intends", "expects", and words of similar import, constitute "forward-looking
statements".  Such forward-looking statements involve numerous assumptions
about known and unknown risks, uncertainties and other factors which may
ultimately prove to be inaccurate.  Certain of these factors are discussed in
more detail elsewhere in this Annual Report, including without limitation under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" and include the Company's ability to reverse the
erosion of gross margin efficiencies, to reduce general and administrative
expenses, including those associated with litigation, and to achieve
profitability.  Actual results may differ materially from any future results
expressed or implied by such forward looking statements.  The Company disclaims
any obligation to update any forward-looking statements or publicly revise any
of the forward-looking statements contained herein to reflect future events or
developments.

                                       
ONGOING OPERATIONAL LOSSES AND LIQUIDITY

     The changes mentioned here and elsewhere in this report were implemented
in late fiscal 1997 and the other additional improvements are continuing to be
implemented in fiscal 1998. Management believes that based on fully
implementing these plans in fiscal 1998, and realizing the benefit of these
improvements in fiscal 1998 and 1999, the Company's operating losses will be
reversed and its liquidity improved.


                                       17
<PAGE>   20



     LEGAL PROCEEDINGS

     The Company and certain officers and directors are defendants in two
separate lawsuits that purport to be class actions and allege certain
misrepresentations and fraudulent actions by the defendants.  While the Company
believes both actions are without merit, a negative outcome would have a
material adverse effect upon the Company's business, operating results and
financial condition.  See Item 3. Legal Proceedings.

     The Company is involved in several other legal issues, particularly with
Denise Austin, a former celebrity endorsement representative, that may be
difficult to resolve and may continue to absorb Company management time and
resources.

     PRODUCTS AND MARKETS

     The Company believes there will continue to be a strong market for its
products and product lines but a substantial change in consumer preference away
from a particular product, particularly trampolines, could seriously effect the
Company's ability to produce sales at the same level as is currently enjoyed.

     The Company's customer base is highly concentrated with a few key mass
merchandisers.  Insolvency, or a slow down in payments or a change in buying
habits, of any of these customers would have a material adverse impact on the
Company.

     VENDOR PRICING

     The Company plans to continue to negotiate better prices from its vendors
in fiscal 1998.  The Company has had initial success and plans to explore all
avenues of product sourcing.  However, there are no guarantees that it will
have additional success in this regard.  Failure to negotiate lower prices
would have a material adverse on the Company's future earnings.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.

     The consolidated financial statements and schedules of the Company as of
March 31, 1997, and 1996, and for each of the years in the three-year period
ended March 31, 1997, are included as part of this Report beginning on page F-1
hereof.


                                       18
<PAGE>   21


                                    PART III


 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
           The directors and executive officers of the Company are as follows:



<TABLE>
<CAPTION>
       NAME          AGE                         POSITION
-------------------  ---  ------------------------------------------------------
<S>                  <C>  <C>
Glenn D. Bollinger   46   Chairman of the Board and Chief Executive Officer

Bobby D. Bollinger   44   Vice Chairman of the Board and President

Rose Turner          40   Senior Vice President - Finance, Chief Financial
                          Officer, Treasurer and Secretary

James A. Burgin      55   Executive Vice President - Sales

Jack P. Carrithers   49   Executive Vice President - Marketing

Dell K. Bollinger    70   Senior Vice President - Administration

David Barr           38   Executive Vice President - Product Acquisition

Floyd DePauw         46   Controller and Chief Accounting Officer

John L. Maguire      66   Director

Stephen L. Parr      43   Director

Richard J. Tucker    49   Director
</TABLE>

     Set forth below is a description of the backgrounds of each of the
directors and executive officers of the Company.

     Glenn D. Bollinger is a co-founder of the Company and has served as
Chairman of the Board and Chief Executive Officer since 1979.  Mr. Bollinger
is primarily responsible for the Company's overall operations, including
inventory, manufacturing and warehousing.

     Bobby D. Bollinger is a co-founder of the Company and has served as Vice
Chairman of the Board and President since 1979.  Mr. Bollinger is primarily
responsible for sales, marketing and product development.  Mr. Bollinger is
Glenn Bollinger's brother.

     Rose Turner became Senior Vice President - Finance, Chief Financial
Officer, Treasurer and Secretary of the Company in  January 1997 after joining
the Company on a contract and full time basis starting in November 1995.  Ms.
Turner is a certified public accountant. Ms. Turner was most recently employed
by Mission Foods, a Division of Gruma Corporation, a privately held company
headquartered in Los Angeles, California.  Mission Foods is a food
manufacturing firm with operations throughout the United States.  Ms. Turner
served as Regional Controller, Southwest Region, for the past four years.  She
was employed by  a variety of food manufacturing companies for approximately
seventeen years in increasing roles of responsibility.


                                       19
<PAGE>   22


     James A. Burgin became Vice President - Sales in December 1993.  He
became Executive Vice President of Sales in November 1994.  Before joining the
Company, Mr. Burgin was Executive Vice President of Dynamic Classics, Ltd.,
distributor of fitness products.  Mr. Burgin was employed by Dynamic for
approximately three years.  Prior to Dynamic,  Mr. Burgin was employed by
various companies in the fitness and toy industries for approximately twenty
years.

     Jack P. Carrithers became acting Vice President - Marketing in December
1993 and was elected Vice President - Marketing in May 1994.  He became
Executive Vice President in November 1994.  Before joining the Company, Mr.
Carrithers was a Vice President and Creative Director of Penny & Speier
Advertising Agency from July 1991 to November 1993.  Prior to that employment,
he was an Executive Vice President and Creative Director of Evans
Communications for six years.  In these past positions, Mr. Carrithers had
responsibility for developing marketing and advertising programs and materials
for a broad range of products and services.

     Dell K. Bollinger became involved in the Company's business when it was
founded by her sons, Glenn and Bobby Bollinger, in 1974.  Mrs. Bollinger has
served as a Vice President of the Company since 1979.

     David Barr became Vice President - Product Development in July 1994 and
became Executive Vice President of New Products and Product Acquisition in
August 1996. Prior to joining the Company Mr. Barr was President and Owner of
New Zone Corporation, a privately held distributor of children's safety and
related products.  Prior to that employment Mr. Barr held various positions at
Tandy Corporation, Fort Worth Texas, including Director of Marketing for
Computer City.

     Floyd DePauw became Controller and Chief Accounting Officer in October
1996.  Mr. DePauw is a certified public accountant.  Before joining the
Company, Mr. DePauw was most recently the controller of Taylor Publishing
Company, a subsidiary of Insilco Corporation, a publicly owned company.  He was
employed by Taylor in a variety of accounting positions for approximately 16
years.  Prior to Taylor, Mr. DePauw was employed by Zoecon Industries, Inc., a
chemical manufacturer, for approximately five years.

     John L. Maguire became a director in September 1993 and served as interim
Chief Financial Officer from August 1992 to August 1993.  In addition, the
Company employs Mr. Maguire as a salaried consultant on certain financial
matters and acquisitions.  Mr. Maguire is a certified public accountant.
Since 1982, he has been self-employed, concentrating on private family
investments.  He was previously Chief Financial Officer of Tyson Foods, Inc.,
for 12 years.  Mr. Maguire was a director of Arkansas Equity Growth Fund,
Inc., a publicly held investment company which was liquidated in July 1993 and
subsequently dissolved.

     Stephen L. Parr became a Director of the Company in November 1995.  Mr.
Parr is currently President of Navigator Capital Management, LLC.  Mr. Parr was
previously a Vice President of Goldman Sachs where he was an international
specialist.  Mr. Parr was with Goldman Sachs from 1977 to 1995.  Mr. Parr
serves on the Board of Directors of DayStar Digital, a Georgia computer
company, Nextek, Inc., an Alabama electronics company, and Corphealth, Inc., a
Texas behavioral healthcare company.

     Richard J. Tucker was retained by the Company in July of 1995 as a
consultant on certain financial and other matters, and shortly thereafter
became a director.  He is the Chairman and Chief Executive Officer of First
Fidelity Acceptance Corp., a nationwide automobile finance company
headquartered in Plano, Texas.  Mr. Tucker has been employed by First Fidelity
since 1992.  Prior to First Fidelity, Mr. Tucker was President of two holding
companies, EntreCap International, Inc. and  International Asset Management
Group, Inc.


                                       20
<PAGE>   23


     The Company's board of directors is currently composed of five directors,
two of whom are not employees of the Company.  However, one of the non-employee
directors is currently retained as  a consultant to the Company.  All of the
current directors serve until the next annual shareholder's meeting or until
their successors have been duly elected and qualified. Certain of the directors
and officers are defendents to lawsuits as discussed in part 1, item 3 of this
Form 10-K.

ITEM 11.   EXECUTIVE COMPENSATION.

     The following table summarizes the compensation paid to the Company's
chief executive officer and the Company's three other most highly compensated
executive officers for services rendered in all capacities to the Company
during fiscal 1997, 1996 and fiscal 1995.

                           SUMMARY COMPENSATION TABLE
                              ANNUAL COMPENSATION
<TABLE>
<CAPTION>                                                           
                                                             OTHER ANNUAL                   ALL OTHER       
         NAME AND                          SALARY   BONUS    COMPENSA-        OPTIONS        COMPENSA-      
    PRINCIPAL POSITION              YEAR    ($)      ($)     TION ($)(1)        (#)          TION ($)       
--------------------------          ----  --------  ------  --------------  -----------  -----------------  
<S>                                 <C>   <C>       <C>     C>               <C>          <C>               
Glenn D.  Bollinger.............    1997  $275,717    -           -             -               -           
  Chairman of the Board and         1996   275,717                                                          
  Chief Executive Officer.......    1995   275,735    -           -             -               -           
                                                                                                            
Bobby D.  Bollinger.............    1997   275,717    -           -             -               -           
  Vice Chairman of the Board        1996   275,717                                                          
  and President.................    1995   275,735    -           -             -               -           
                                                                                                           
James A. Burgin.................    1997   118,120   3,008        -             -               -           
  Executive Vice President -        1996   118,024    -           -             -               -           
  Sales.........................    1995    78,462  18,748        -           5,000             -           
                                                                                                            
John T. Pryor...................    1997   109,723    -           -          25,000             -           
  Former CFO -                      1996         -    -           -             -               -           
  Senior Vice President.........    1995         -    -           -             -               -           
</TABLE>                                                             

--------------------
(1)  Certain of the Company's executive officers receive personal benefits in
     addition to salary and cash bonuses.  The aggregate amount of the personal
     benefits, however, do not exceed the lesser of $50,000 or 10% of the total
     of the annual salary and bonus reported for the named executive.

OPTIONS EXERCISES AND HOLDINGS

     The following table sets forth information with respect to the named
executives concerning exercise of options during fiscal 1997 and unexercised
options held as of the end of fiscal 1997.

                                       21
<PAGE>   24



                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES


<TABLE>
<CAPTION>                                                           
                                                                                                VALUE OF UNEXERCISED
                                                             NUMBER OF UNEXERCISED                 IN-THE MONEY
                                                                  OPTIONS AT                      OPTIONS AT FISCAL
                      SHARES                                  FISCAL YEAR-END (#)                  YEAR-END ($) (1)
                      ACQUIRED                           ------------------------------  ----------------------------------
                        ON                VALUE 
     NAME           EXERCISE (#)       REALIZED ($)        EXERCISABLE    UNEXERCISABLE      EXERCISABLE      UNEXERCISABLE
---------------  ------------------  ------------------  ---------------  -------------  -------------------  -------------
<S>              <C>                 <C>                 <C>              <C>             <C>                 <C>
James A. Burgin          -                   -                8,500           6,500               -                 -
</TABLE>

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

(1)  Based on the closing sale price of the common stock on March 31, 1997, of
     $.75 per share as reported by the over-the-counter Bulletin Board and a
     weighted average exercise price per share of $10.30.

DIRECTOR'S COMPENSATION

     Each independent director receives a fee of $10,000 annually and is
reimbursed for out-of-pocket expenses incurred in connection with attendance at
board of directors and committee meetings.  Each independent director was
granted options to purchase 8,333 shares of Common Stock at the time he became
a director.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth certain information with respect to the
beneficial ownership of the shares of Common Stock of the Company, as of June
16, 1997, by (i) each director, (ii) the Company's chief executive officer and
two other most highly compensated executive officers in fiscal 1997, (iii) all
officers and directors of the Company as a group, and (iv) each person deemed
to beneficially own more than five percent of the outstanding shares of Common
Stock.  Except as otherwise indicated, each stockholder identified in the table
has sole voting and investment power with respect to its or his shares.


<TABLE>
<CAPTION>
                                               SHARES OWNED
                                           ---------------------
NAME                                        NUMBER    PERCENTAGE
----                                       ---------  ----------
<S>                                        <C>        <C>
Glenn D.  Bollinger (1)(2)                 1,885,563     47.1
Bobby D.  Bollinger (1)(3)                 1,885,563     47.1
James A. Burgin (4)                            8,500      *
John L.  Maguire (5)                          62,333         1.6
Richard J.  Tucker                             -          *
Stephen L. Parr                                2,500      *
All directors and executive officers as a
  group (11 persons) (6) (7) (8)           2,413,281     60.3
</TABLE>

------------------
*    Less than 1% of the outstanding shares of Common Stock.
(1)  Business mailing address is 602 Fountain Parkway, Grand Prairie, Texas
     75050.
(2)  Includes (i) 425,069 shares over which Glenn Bollinger has sole voting
     and investment control; (ii) 436,000 shares held by Glenn Bollinger Family
     Enterprises, Ltd., a Texas limited partnership, over which Glenn Bollinger
     has shared voting and investment power because he and his brother Bobby
     Bollinger each own 49.5% of the outstanding stock of the sole general
     partner; (iii) 436,000 shares held by Bob Bollinger Family Enterprises,
     Ltd., a Texas limited partnership, over which Glenn Bollinger has shared
     voting and investment

                                       22
<PAGE>   25

     power because he and his brother Bobby Bollinger each own 49.5% of the
     outstanding stock of the sole general partner; and (iv) 588,494 shares held
     by the trustees of the Company's 401(K) Plan successor to the Company's
     Employee Stock Ownership Plan (the "401(K) Plan"), including Glenn
     Bollinger, and over which he has shared voting and investment power.
     Neither the inclusion of shares owned by Bob Bollinger Family Enterprises,
     Ltd., nor the inclusion of any 401(K) Plan  shares not allocated to Glenn
     Bollinger's 401(K) participant account is to be construed as an admission
     that he is the beneficial owner of such shares.
(3)  Includes (i) 425,069 shares over which Bobby Bollinger has sole voting
     and investment control; (ii) 436,000 shares held by Bob Bollinger Family
     Enterprises, Ltd., a Texas limited partnership, over which Bobby Bollinger
     has shared voting and investment power because he and his brother Glenn
     Bollinger each own 49.5% of the outstanding stock of the sole general
     partner; (iii) 436,000 shares held by Glenn Bollinger Family Enterprises,
     Ltd., a Texas limited partnership, over which Bobby Bollinger has shared
     voting and investment power because he and his brother Glenn Bollinger
     each own 49.5% of the outstanding stock of the sole general partner; and
     (iv) 588,494 shares held by the trustees of the 401(K) Plan, including
     Bobby Bollinger over which he has shared voting and investment power.
     Neither the inclusion of shares owned by Glenn Bollinger Family
     Enterprises, Ltd., nor the inclusion of any 401(K) Plan shares not
     allocated to Bobby Bollinger's 401(K) participant account is to be
     construed as an admission that he is the beneficial owner of such shares.
(4)  Includes options to purchase 8,500 shares of Common Stock that are
     currently exercisable or will be exercisable within sixty days.
(5)  Includes options to purchase 54,999 shares of Common Stock that are
     currently exercisable or will be exercisable within sixty days.  Does not
     include 1,000 shares of Common Stock held in trust for which the reporting
     person is the trustee and is a contingent beneficiary.  The reporting
     person disclaims beneficial ownership of these shares.
(6)  Includes options to purchase 86,499 shares of Common Stock that are
     currently exercisable or will be exercisable within sixty days.
(7)  Shares which are included beneficially under both Glenn and Bobby
     Bollinger are only included once in the group total.
(8)  Includes 1,300 and 100 shares of Common Stock, respectively, beneficially
     owned by two executive officers of the Company, which are held by brokers
     as custodians for the officers' individual retirement accounts.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     In April 1993, an independent sales representative of the Company,
advanced $500,000 to the Company for working capital.  The loan was evidenced
by the Company's real estate lien note bearing interest at 10% per annum due
March 31, 1996, and secured in part by a lien on the Company's Irving facility.
In connection with this loan, the Company issued 34,405 shares of Common
Stock.  In December 1993, Messrs.  Glenn and Bobby Bollinger and Mrs.  Dell
Bollinger purchased the note and received an assignment of the real estate lien
in consideration of payment of the outstanding principal balance of the note.
On March 29, 1996, the Company paid each of Messrs. Glenn and Bobby Bollinger
$110,000 against the note.   The proceeds of the note payments were used by
Messrs. Glenn and Bobby Bollinger to exercise certain stock options granted in
1991.  The Company extended the maturity of the $100,000 note to March 31, 1998
and remaining notes of $180,000 to August 16, 2000.  In May 1996, a priority
lien on the real estate was granted to a bank to secure the Company's credit
facility.

     The Company believes that the terms of the above transaction were at least
as favorable to the Company as those which could have been obtained in an arm's
length transaction with an unaffiliated party.

     During July, 1995, the Company retained Mr. Richard Tucker as a
consultant.  Shortly after his retention, Mr. Tucker became a director of the
Company.  Pursuant to the consulting agreement, Mr. Tucker received $75,000 per
year for 2 years, of which $75,000 was paid in fiscal 1997 and $56,250 was paid
in fiscal 1996.  The remaining $18,750 was paid in the first quarter of fiscal
1998.


                                       23
<PAGE>   26


     All transactions, if any, between the Company and any of its directors,
officers, principal stockholders, employees and other affiliates of the Company
are subject to the approval of a majority of the independent directors of the
Company who are disinterested in the transactions.  All such transactions and
loans must be on terms no less favorable to the Company than those generally
available from unaffiliated third parties.

                                       24
<PAGE>   27


                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) The following documents are filed as a part of this report:


1.   -    Consolidated financial statements to this Report are listed in the
          "Index to Consolidated Financial Statements and Schedules" at page
          F-1.

2.   -    Consolidated financial statement schedules to this Report are listed
          in the "Index to Consolidated Financial Statements and Schedules" at
          page F-1.  All other schedules are omitted because they are
          inapplicable or the requested information is shown in the financial
          statements or noted therein.

3.   -    Exhibits.

3.1  -    Certificate of Incorporation of the Company (incorporated by
          reference to Exhibit 3.1 to the Company's Form S-1 Registration
          Statement No. 33-69708)

3.2  -    By-Laws of the Company (incorporated by reference to Exhibit 3.2 to
          the Company's Form S-1 Registration Statement No.  33-69708)

4.1  -    Form of certificate representing shares of the Company's Common Stock
          (incorporated by reference to Exhibit 4.1 to the Company's Form S-1
          Registration Statement No. 33-69708)

10.1 -    Bollinger Industries 1993 Stock Option Plan (incorporated by
          reference to Exhibit 10.1 to the Company's Form S-1 Registration
          Statement No. 33-69708)
     
10.2 -    Bollinger Industries Employee Stock Ownership Plan and Trust
          (incorporated by reference to Exhibit 10.2 to the Company's Form
          S-1 Registration Statement No. 33-69708)
     
10.3 -    Form of Indemnification Agreement with independent director
          (incorporated by reference to Exhibit 10.3 to the Company's Form
          S-1 Registration Statement No. 33-69708)
     
10.4 -    Bollinger Industries, Inc.  1991 Incentive Stock Option Plan
          (incorporated by reference to Exhibit 10.4 to the Company's Form
          S-1 Registration Statement No. 33-69708)
     
10.5 -    Lease Agreement dated April 4, 1991, between William A.  McCarty,
          Jr., and Elinor F.  McCarty and Bollinger Sports, Inc., formerly
          known as Bollinger Industries, Inc. ("Bollinger-Texas")
          (incorporated by reference to Exhibit 10.8 to the Company's Form
          S-1 Registration Statement No. 33-69708)
     
10.6 -    Assignment and Assumption Agreement dated as of October 1, 1993,
          between Bollinger-Texas as Assignor and Bollinger Industries, L.P.,
          as Assignee with respect to such lease (incorporated by reference
          to Exhibit 10.8.1 to the Company's Form S-1 Registration Statement
          No. 33-69708)
     
10.7 -    Lease Agreement dated August 30, 1992, between Reba McPherson,
          individually and as Trustee of the Reba McPherson Trust u/w/o
          Harold Lynn McPherson, and Tarbox, Inc., as extended by an
          Agreement dated August 9, 1993 (incorporated by reference to
          Exhibit 10.9 to the Company's Form S-1 Registration Statement No.
          33-69708)


                                       25
<PAGE>   28


10.8  -    Assignment and Assumption Agreement dated as of October 1, 1993,    
           between Tarbox, Inc., as Assignor and Bollinger Industries, L.P.,   
           as Assignee with respect to such lease (incorporated by reference   
           to Exhibit 10.9.1 to the Company's Form S-1 Registration Statement  
           No. 33-69708)                                                      
                                                                               
10.9  -    Standard Industrial Lease dated March 17, 1993, between National    
           Life Insurance Company and Bollinger-Texas (incorporated by         
           reference to Exhibit 10.10 to the Company's Form S-1 Registration   
           Statement No. 33-69708)                                            
                                                                               
10.10 -    Assignment and Assumption Agreement dated as of October 1, 1993,    
           between Bollinger-Texas as Assignor and Bollinger Industries, L.P., 
           as Assignee with respect to such lease (incorporated by reference   
           to Exhibit 10.10.1 to the Company's Form S-1 Registration Statement 
           No. 33-69708)                                                      
                                                                               
10.11 -    $500,000 Real Estate Lien Note dated March 18, 1993, in favor of    
           Sid Reisman and executed by Bollinger-Texas, as modified by a       
           Renewal, Extension, and Modification Agreement dated as of April 6, 
           1993, and subsequently assigned to Glenn, Bobby and Dell Bollinger  
           (incorporated by reference to Exhibit 10.10 to the Company's Form   
           S-1 Registration Statement No. 33-69708)                            
                                                                               
10.12 -    Asset Purchase and Sale Agreement dated as of September 13, 1993,   
           by and between California Gym Equipment Company, S. G. Equipment,   
           Inc. and, for limited purposes, Bollinger-Texas and Sherman Grider  
           (incorporated by reference to Exhibit 10.13 to the Company's Form   
           S-1 Registration Statement No. 33-69708)                           
                                                                               
10.13 -    Standard Sublease dated as of September 13, 1993, between           
           California Gym Equipment Company and S. G. Equipment, Inc.,         
           together with the Industrial Real Estate Lease dated June 1, 1992,  
           between New England Mutual Life Insurance Company and               
           Bollinger-Texas attached thereto (incorporated by reference to      
           Exhibit 10.14 to the Company's Form S-1 Registration Statement No.  
           33-69708)                                                           
                                                                               
10.14 -    Assignment and Assumption Agreement dated as of September 1, 1993,  
           between Bollinger-Texas and California Gym Equipment Company with   
           respect to Industrial Real Estate Lease dated June 1, 1992          
           (incorporated by reference to Exhibit 10.15 to the Company's Form   
           S-1 Registration Statement No. 33-69708)                           
                                                                               
10.15 -    Letter agreement dated May 19, 1992, between Bollinger-Texas,       
           Denise Austin and Jeff Austin (incorporated by reference to Exhibit 
           10.16 to the Company's Form S-1 Registration Statement No.          
           33-69708)                                                           
                                                                               
10.16 -    Letter agreement dated April 13, 1994, between Bollinger            
           Industries, L.P., Denise Austin and Jeff Austin (incorporated by    
           reference to Exhibit 10.16 to the Company's form 10-K for the       
           fiscal year ended March 31, 1994)                                   
                                                                               
10.17 -    Endorsement Agreement dated September 1, 1993, between              
           Bollinger-Texas and Nolan Ryan (incorporated by reference to        
           Exhibit 10.17 to the Company's form 10-K for the fiscal year ended  
           March 31, 1994)                                                     
                                                                               
10.18 -    Loan Agreement dated as of January 4, 1994, between Bollinger       
           Industries, L.P., the Company, and First Interstate (incorporated   
           by reference to Exhibit 10.18 to the Company's form 10-K for the    
           fiscal year ended March 31, 1994)                                   
     

                                       26
<PAGE>   29


10.19 -    Standard Office/Warehouse Lease dated May 11, 1994, between
           Fountain Parkway, Ltd., and Bollinger Industries, L.P.
           (incorporated by reference to Exhibit 10.19 to the Company's form
           10-K for the fiscal year ended March 31, 1994)
      
10.20 -    Lease dated December 21, 1990, between Americus/Sumter Payroll
           Development Authority and N.B.F., Inc.  and R.  Wayne Rich
           (incorporated by reference to Exhibit 10.20 to the Company's form
           10-K for the fiscal year ended March 31, 1994)
      
10.21 -    Assignment and Assumption of Lease dated May 1, 1994, between
           Americus/Sumter Payroll Development Authority, NBF, Inc., a Florida
           corporation, and NBF, Inc., a Georgia corporation (incorporated by
           reference to Exhibit 10.21 to the Company's form 10-K for the
           fiscal year ended March 31, 1994)
      
10.22 -    Amendment to Lease between Americus-Sumter Payroll Development
           Authority and NBF, Inc., a Georgia corporation and R.  Wayne Rich
           amending the lease dated December 21, 1990 reflected at exhibit No.
           10.20 above (incorporated by reference to Exhibit 10.2 to the
           Company's form 10-Q for the quarter ended June 30, 1994)
      
10.23 -    Asset Purchase Agreement dated May 24, 1994, and effective as of
           May 1, 1994, between NBF, Inc., a Florida corporation, and NBF,
           Inc., a Georgia corporation (incorporated by reference to Exhibit
           10.3 to the Company's form 10-Q for the quarter ended June 30,
           1994)
      
10.24 -    First Amendment to Loan Agreement dated as of June 22, 1994,
           between Bollinger Industries, L.P., the Registrant, Bollinger
           Holding Corp., NBF and First Interstate Bank of Texas, N.A.
           (incorporated by reference to Exhibit 10.5 to the Company's form
           10-Q for the quarter ended June 30, 1994)
      
10.25 -    Loan and Security Agreement dated September 9, 1994, between
           Bollinger Industries, L.P. and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.1 to the Company's form
           10-Q for the quarter ended September 30, 1994)
      
10.26 -    First Amendment to Loan and Security Agreement dated September 9,
           1994, between Bollinger Industries, L.P. and NationsBank of Texas,
           N.A.  (incorporated by reference to Exhibit 10.2 to the Company's
           form 10-Q for the quarter ended September 30, 1994)
      
10.27 -    Second Amendment to Loan and Security Agreement dated December 8,
           1994, between Bollinger Industries, L.P. and NationsBank of Texas,
           N.A.  (incorporated by reference to Exhibit 10.1 to the Company's
           form 10-Q for the quarter ended December 31, 1994)
      
10.28 -    Lease Agreement dated November 16, 1994, between John Wilkerson,
           individually and Bollinger Industries (incorporated by reference to
           Exhibit 10.2 to the Company's form 10-Q for the quarter ended
           December 31, 1994)
      
10.29 -    Modification and Ratification of Lease dated November 1, 1994,
           between Fountain Parkway, Ltd.  and Bollinger Industries, L.P.
           (incorporated by reference to Exhibit 10.3 to the Company's form
           10-Q for the quarter ended December 31, 1994)



                                       27
<PAGE>   30

10.30 -    Third Amendment to Loan and Security Agreement dated March 3, 1995
           between Bollinger Industries, L.P. and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.30 to the Company's Form
           10-K for the fiscal year ended March 31, 1995)
      
10.31 -    Fourth Amendment to Loan and Security Agreement dated May 15, 1995
           between Bollinger Industries, L.P.  and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.31 to the Company's Form
           10-K for the fiscal year ended March 31, 1995)
      
10.32 -    Modification and Ratification of Lease dated February 22, 1995,
           between Fountain Parkway, Ltd.  and Bollinger Industries, L.P.
           (incorporated by reference to Exhibit 10.32 to the Company's Form
           10-K for the fiscal year ended March 31, 1995)
      
10.33 -    Fifth Amendment to Loan and Security Agreement dated September 9,
           1995, between Bollinger Industries, L.P. and NationsBank of Texas,
           N.A. (incorporated by reference to Exhibit 10.1 to the Company's
           Form 10-Q for the quarter ended December 31, 1995)
      
10.34 -    Sixth Amendment to Loan and Security Agreement dated December 29,
           1995, between Bollinger Industries, L.P. and NationsBank of Texas,
           N.A. (incorporated by reference to Exhibit 10.2 to the Company's
           Form 10-Q for the quarter ended December 31, 1995)
      
10.35 -    Seventh Amendment to Loan and Security Agreement dated March 8,
           1996, between Bollinger Industries, L.P. and NationsBank of Texas,
           N.A. (incorporated by reference to Exhibit 10.35 to the Company's
           Form 10K for the year ended March 31, 1996)
      
10.36 -    Eighth Amendment to Loan and Security Agreement dated May 8, 1996,
           between Bollinger Industries, L.P. and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.36 to the Company's
           Form 10K for the year ended March 31, 1996)

10.37 -    Deed of Trust, Assignment, Security Agreement and Financing
           Statement dated May 8, 1996, between Bollinger Industries, L.P. and
           NationsBank of Texas, N.A. (incorporated by reference to Exhibit 
           10.37 to the Company's Form 10K for the year ended March 31, 1996)
      
10.38 -    Ninth Amendment to Loan and Security Agreement dated May 17, 1996,
           between Bollinger Industries, L.P. and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.38 to the Company's
           Form 10K for the year ended March 31, 1996)
      
10.39 -    Amended and Restated Promissory Note dated March 29, 1996, between
           Bollinger Industries, L.P., and Glenn D. Bollinger (incorporated by 
           reference to Exhibit 10.39 to the Company's Form 10K for the year 
           ended March 31, 1996)
      
10.40 -    Amended and Restated Promissory Note dated March 29, 1996, between
           Bollinger Industries, L.P., and Bobby D. Bollinger (incorporated by 
           reference to Exhibit 10.40 to the Company's Form 10K for the year 
           ended March 31, 1996)
      
10.41 -    Amended and Restated Promissory Note dated March 29, 1996, between
           Bollinger Industries, L.P., and Dell Bollinger (incorporated by 
           reference to Exhibit 10.41 to the Company's Form 10K for the year 
           ended March 31, 1996)
      
10.42 -    Second Amendment to standard industrial lease dated January 31,
           1996, between National Life Insurance Company and Bollinger
           Industries, L.P., as assignee (incorporated by reference to Exhibit 
           10.42 to the Company's Form 10K for the year ended March 31, 1996)
      
10.43 -    U.S. Trademark License Agreement between International Apparel
           Marketing Corp. dba Nautilus Wear International and Bollinger
           Industries, Inc. dated May 1, 1995  (incorporated by reference to 
           Exhibit 10.43 to the Company's Form 10K for the year ended March 31,
           1996)
      
10.44 -    Amendment to U.S. Trademark License Agreement between International
           Apparel Marketing Corp. and Bollinger Industries, Inc. dated March
           1, 1996 (incorporated by reference to Exhibit 10.44 to the Company's
           Form 10K for the year ended March 31, 1996)
      

                                       28
<PAGE>   31


10.45 -    Intercreditor and Subordination Agreement dated May 8, 1996,
           between NationsBank of Texas, N.A. and Glenn D. Bollinger, Bobby D.
           Bollinger, and Dell Bollinger (incorporated by reference to Exhibit 
           10.45 to the Company's Form 10K for the year ended March 31, 1996)

10.46 -    Eleventh Amendment to Loan and Security Agreement dated July 8, 1996,
           between Bollinger Industries, LP, and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.46 to the Company's form 
           10-Q for the quarter ended September 29, 1996)

10.47 -    Loan and Security Agreement dated August 16, 1996 between Bollinger
           Industries, Inc., Bollinger Industries, LP and NBF, Inc. and
           Foothill Capital Corporation and related schedules. (incorporated
           by reference to Exhibit 10.47 to the Company's form 10-Q for the
           quarter ended September 29, 1996)
     
10.48 -    Collateral Assignment of Patents and Trademarks dated August 16,
           1996 between Bollinger Industries, LP and Foothill Capital
           Corporation. (incorporated by reference to Exhibit 10.48 to the
           Company's form 10-Q for the quarter ended September 29, 1996)
     
10.49 -    Subordination Agreement dated August 16, 1996 between Glenn D.
           Bollinger, Bobby D. Bollinger, Dell Bollinger and Foothill Capital
           Corporation. (incorporated by reference to Exhibit 10.49 to the
           Company's form 10-Q for the quarter ended September 29, 1996)
     
10.50 -    Deed of Trust dated August 16, 1996 executed by Bollinger
           Industries, LP (incorporated by reference to Exhibit 10.50 to the
           Company's form 10-Q for the quarter ended September 29, 1996)
     
10.51 -    Asset Purchase Agreement dated August 29, 1996 between Bollinger
           Industries, LP, and Rehab Plus Therapeutic Products, Inc.
           (incorporated by reference to Exhibit 10.51 to the Company's form
           10-Q for the quarter ended September 29, 1996)
     
10.52 -    Tenth Amendment to Loan and Security Agreement dated July 8,1996,
           between Bollinger Industries, LP, and NationsBank of Texas, N.A.
           (incorporated by reference to Exhibit 10.1 to the Company's form
           10-Q for the quarter ended June 30, 1996)
     
10.53 -    Asset Purchase Agreement dated August 29, 1996 between Bollinger
           Industries, LP, and Rehab Plus Therapeutic Products, Inc.
           (incorporated by reference to Exhibit 2.01 to the Company's form
           10-Q for the quarter ended September 29, 1996)
     
10.54 -    Asset Purchase Agreement dated November 7, 1996, between Bollinger
           Industries, LP, and SST Acquisition Corporation (incorporated by
           reference to Exhibit 2.01 to the Company's form 10-Q for the
           quarter ended December 29, 1996)
     
10.55 -    First Amendment to Loan and Security Agreement dated August 16,
           1996, between Bollinger Industries, Inc., Bollinger Industries, LP
           and NBF, Inc. and Foothill Capital Corporation.
     
10.56 -    Second Amendment to Loan and Security Agreement dated August 16,
           1996, between Bollinger Industries, Inc., Bollinger Industries, LP
           and NBF, Inc. and Foothill Capital Corporation.
     
10.57 -    Lease Agreement dated December 1, 1996 between Southwest Properties
           Group, Inc. and Bollinger Industries, LP
     
11.1  -    Statement re Computation of Per Share Data
     
21.1  -    List of the Company's subsidiaries (incorporated by reference to
           Exhibit 21.1 to the Company's Form 10-K for the fiscal year ended
           March 31, 1995)

     

                                       29
<PAGE>   32


27.1   -    Financial Data Schedule


        (b) Reports on Form 8-K.

            None.



                                       30
<PAGE>   33



                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the 16th  day
of June, 1997.
                                        
                                        BOLLINGER INDUSTRIES, INC.


                                        By: /S/ Glenn D. Bollinger
                                           ------------------------------------
                                            Glenn D.  Bollinger
                                            Chairman of the Board and Chief
                                            Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of the 16th day of July, 1996.


<TABLE>
<S>                     <C>
/S/ Glenn D. Bollinger  Chairman of the Board, President, and Chief
----------------------  Executive Officer (principal executive officer)
 Glenn D.  Bollinger                                                   

/S/ Bobby D. Bollinger  Vice Chairman of the Board and President
----------------------
 Bobby D.  Bollinger

   /S/ Rose Turner      Senior Vice President - Finance, Chief Financial
----------------------  Officer, Treasurer, and Secretary 
     Rose Turner        (principal financial officer)     
                                                          

   /S/ Floyd DePauw     Controller and Chief Accounting Officer (principal
----------------------  accounting officer)
     Floyd DePauw                          

 /S/ John L. Maguire    Director
----------------------
   John L.  Maguire

 /S/ Stephen L. Parr    Director
----------------------
   Stephen L. Parr

/S/ Richard J. Tucker   Director
----------------------
  Richard J.  Tucker
</TABLE>

                                     S-1

<PAGE>   34
                 BOLLINGER INDUSTRIES, INC. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS
                                 AND SCHEDULES






                                      F-1
<PAGE>   35


            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES


<TABLE>
<S>                                                                         <C>
                                                                           Page
Report of Independent Certified Public Accountants                          F-3

Consolidated Balance Sheets as of March 31, 1997 and 1996                   F-4

Consolidated Statements of Operations for each of the three 
years ended March 31, 1997                                                  F-6

Consolidated Statements of Changes in Stockholders' Equity 
for each of the three years ended March 31, 1997                            F-7

Consolidated Statements of Cash Flows for each of the three              
years ended March 31, 1997                                                  F-8

Notes to Consolidated Financial Statements                                  F-9

Report of Independent Certified Public Accountants on Schedule              F-24

Schedule II                                                                 F-25
</TABLE>


                                      F-2
<PAGE>   36



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




BOARD OF DIRECTORS AND STOCKHOLDERS
BOLLINGER INDUSTRIES, INC. AND SUBSIDIARIES

We have audited the accompanying consolidated balance sheets of Bollinger
Industries, Inc. and Subsidiaries as of March 31, 1997, and 1996, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years ended March 31, 1997.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bollinger
Industries, Inc. and Subsidiaries as of March 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years
ended March 31, 1997, in conformity with generally accepted accounting
principles.



                                                      KING GRIFFIN & ADAMSON, PC

Dallas, Texas
June 16, 1997





                                      F-3
<PAGE>   37


                BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                                   MARCH 31,
<TABLE>
                    ASSETS                         1997             1996                                                          
                                                 -----------  ---------------                                                     
CURRENT ASSETS                                                                                                                    
<S>                                                    <C>               <C>                                                      
  Cash                                           $     3,481     $    408,871                                                     
  Accounts receivable                                                                                                             
    Trade, net of allowance for doubtful                                                                                          
      accounts of $844,312 and $457,829           16,804,959       18,344,827                                                     
    Other                                            177,208          229,735                                                     
  Income tax refund                                        -        2,307,235                                                     
  Inventories                                     16,201,780       30,112,934                                                     
  Current assets of discontinued                                                                                                  
    operations - net                                       -        1,601,954                                                     
  Prepaid expenses                                   533,215          525,272                                                     
  Deferred income taxes                                    -           66,309                                                     
                                                 -----------  ---------------                                                     
      Total current assets                        33,720,643       53,597,137                                                     
                                                                                                                                  
PROPERTY, PLANT AND EQUIPMENT - NET                2,083,402        2,015,282                                                     
                                                                                                                                  
NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS              -          161,999                                                     
                                                                                                                                  
OTHER ASSETS                                                                                                                      
  Goodwill, net of accumulated amortization of                                                                                      
    $213,346 and $157,884                          1,138,654        1,233,482                                                     
  Notes receivable and other                         951,085        1,373,003                                                     
  Deferred financing fees, net of accumulated                                                                                       
    amortization of  $140,385                        495,568                -                                                     
                                                 -----------  ---------------                                                     
      Total other assets                           2,585,307        2,606,485                                                     
                                                 -----------  ---------------                                                     
TOTAL ASSETS                                     $38,389,352      $58,380,903                                                     
                                                 ===========  ===============                                                     
</TABLE> 

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


                                      F-4
<PAGE>   38



                  BOLLINGER INDUSTRIES, INC. AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS - CONTINUED

<TABLE>
<CAPTION>
                                                                      MARCH 31,
           LIABILITIES AND STOCKHOLDERS' EQUITY                  1997           1996
                                                             ------------   ----------- 
CURRENT LIABILITIES
<S>                                                          <C>            <C>
  Current portion of long-term debt and other debt 
    (including $100,000 note payable to officer and
    shareholder in 1997)                                     $  2,841,645   $22,683,575
  Accounts payable - trade                                     11,620,367    16,913,821
  Federal income tax payable                                            -        43,847
  Other current liabilities                                     1,104,318     1,674,046
  Provision for restructuring of operations                     2,160,169     3,960,000
                                                             ------------   -----------
    Total current liabilities                                  17,726,499    45,275,289
LONG-TERM LIABILITIES
  Long-term debt, net of current portion (including $180,000
  and $280,000 notes payable to officers and shareholders in
  1997 and 1996)                                               15,641,720       576,777
Deferred income taxes                                                   -        66,309
                                                             ------------   -----------
    Total long-term liabilities                                15,641,720       643,086
                                                             ------------   -----------
    Total liabilities                                          33,368,219    45,918,375
                                                             ------------   -----------
COMMITMENTS AND CONTINGENCIES (Notes B, E and N)

STOCKHOLDERS' EQUITY
  Preferred stock - $.01 par value;                          
    1,000,000 shares authorized; none issued                            -             -
  Common stock - $.01 par value; 8,000,000 shares authorized;
    4,000,210 shares issued and outstanding                        40,002        40,002
  Capital in excess of par                                     15,323,058    15,323,058
  Accumulated deficit                                         (10,341,927)   (2,900,532)
                                                             ------------   -----------
    Total stockholders' equity                                  5,021,133    12,462,528
                                                             ------------   -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 38,389,352   $58,380,903
                                                             ============   ===========
</TABLE>

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


                                      F-5
<PAGE>   39


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

                             YEARS ENDED MARCH 31,


<TABLE>
<CAPTION>
                                                  1997           1996            1995
                                               -----------    -----------     -----------
<S>                                           <C>             <C>             <C>
Net sales                                      $82,598,593    $80,300,431     $67,894,489
Cost of goods sold                              69,723,015     62,197,227      50,546,515
                                               -----------    -----------     -----------
    Gross profit                                12,875,578     18,103,204      17,347,974
                                                                              
Selling expenses                                 6,878,803      7,876,538       6,861,621
Distribution, general and                                                   
  administrative expenses (including $75,000                                  
  and $56,250 in 1997 and 1996 to a Director)   11,505,641     12,115,284       8,421,762
Restructuring of operations                              -      3,960,000               -
                                               -----------    -----------     -----------
                                                18,384,444     23,951,822      15,283,383
                                               -----------    -----------     -----------
    Operating profit (loss)                     (5,508,866)    (5,848,618)      2,064,591
Other expense (income)                                                        
  Interest expense                               2,551,703      2,251,807       1,166,794
  Other                                            (50,243)      (103,921)        (46,795)
                                               -----------    -----------     -----------
                                                 2,501,460      2,147,886       1,119,999
                                               -----------    -----------     -----------
  Earnings (loss) from continuing operations                                  
    before income tax expense (benefit)         (8,010,326)    (7,996,504)        944,592
                                                                              
Income tax expense (benefit)                       (91,964)    (1,135,098)        350,416
                                               -----------    -----------     -----------
  Earnings (loss) from continuing operations    (7,918,362)    (6,861,406)        594,176

Discontinued operations                                                       
  Gain (loss) from operations, net of income                                  
    tax benefit                                          -       (591,886)       (524,914)
  Gain (loss) on disposal, net of income tax                                  
    expense (benefit) including a $1,199,118                                  
    provision for operating losses during the                                 
    phase-out period in 1996.                      476,967       (770,068)              -
                                               -----------    -----------     -----------
  Earnings (loss) from discontinued operations     476,967     (1,361,954)       (524,914)
                                               -----------    -----------     -----------
  Net earnings (loss)                          $(7,441,395)   $(8,223,360)    $    69,262
                                               ===========    ===========     ===========
Per Share Data:                                                               
  Earnings (loss) from continuing operations   $     (2.04)   $     (1.85)    $       .15
                                               ===========    ===========     ===========
  Net earnings (loss)                          $     (1.86)   $     (2.22)    $       .02
                                               ===========    ===========     ===========
Weighted average common and common                                            
  equivalent shares outstanding                  4,000,210      3,710,484       3,966,631
                                              ============    ===========     ===========
</TABLE>

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

                                      F-6
<PAGE>   40


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                    RETAINED
                                COMMON STOCK         CAPITAL IN     EARNINGS
                           ----------------------     EXCESS OF   (ACCUMULATED
                            SHARES       AMOUNT          PAR         DEFICIT)       TOTAL
                           ---------   ----------   ------------  -------------  -----------
<S>                        <C>           <C>         <C>            <C>            <C>    
Balance at March 31, 1994  3,592,551     $35,926     $14,108,142   $  5,253,566  $19,397,634

Shares issued in                                                                
  connection with                                                               
  acquisition                138,000       1,380         999,120              -    1,000,500

Shares retired               (22,461)       (225)            225              -            -

Net earnings                       -           -               -         69,262       69,262
                           ---------     -------     -----------   ------------   ----------
Balance at March 31, 1995  3,708,090      37,081      15,107,487      5,322,828   20,467,396

Shares issued on                                                                
  exercise of stock                                                             
  options                    292,120       2,921         215,571              -      218,492

Net loss                           -           -               -     (8,223,360)  (8,223,360)
                           ---------     -------     -----------   ------------   ----------
Balance at March 31, 1996  4,000,210      40,002      15,323,058     (2,900,532)  12,462,528
                           ---------     -------     -----------   ------------   ----------
Net loss                           -           -               -     (7,441,395)  (7,441,395)
                           ---------     -------     -----------   ------------   ----------
Balance at March 31, 1997  4,000,210     $40,002     $15,323,058   $(10,341,927)  $5,021,133
                           =========     =======     ===========   ============   ==========
</TABLE>

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



                                      F-7
<PAGE>   41


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             YEARS ENDED MARCH 31,


<TABLE>
<CAPTION>
                                                    1997             1996           1995
                                                ------------    ------------  ------------
<S>                                             <C>              <C>             <C>
Cash flows from operating activities                            
  Net earnings (loss)                           $(7,441,395)    $(8,223,360)  $    69,262
  Adjustments to reconcile net earnings                         
    (loss) to net cash provided by (used in)                    
    operating activities                                        
    (Gain) loss on disposal of assets              (476,967)              -        (5,341)
    Deferred income tax benefit                    (245,709)      1,148,050      (655,005)
    Depreciation and amortization                   891,417         651,500       442,926
    Provision for restructuring of operations             -       3,960,000             -
    Other                                                 -               -        74,000
    Provision for doubtful accounts                 236,483        (311,514)      793,931
    Provision for obsolete inventory                325,991         365,795       852,204
    Changes in operating assets and liabilities                 
      Trade accounts receivable                   1,153,385      (1,513,464)   (5,175,131)
      Other receivables                              52,527          81,476      (159,247)
      Inventories                                12,880,151         581,275   (18,906,836)
      Income tax refund                           2,307,235      (2,307,235)            -
      Prepaid expenses                               58,366         658,348      (393,078)
      Notes receivable, deposits and other          405,611         (44,161)     (599,000)
      Current assets of discontinued operations   1,601,954      (1,601,954)            -
      Accounts payable                           (5,309,916)     10,274,464     3,944,881
      Federal income tax payable                    (43,847)       (389,849)     (160,166)
      Other current liabilities                     233,323         660,813       284,644
      Provision for restructuring operation      (1,799,831)              -             -
      Non-Current assets from discontinued                      
        operations                                  161,999               -             -
                                                -----------     -----------   -----------
    Net cash provided by (used in) operating                    
      activities                                  4,990,777       3,990,184   (19,591,956)

Cash flows from investing activities                            
  Purchases of property and equipment              (621,146)       (425,041)   (1,268,970)
  Payments made on notes receivable                 187,097               -             -
  Proceeds from sale of assets                    1,418,129          58,329        36,205
                                                -----------     -----------   -----------
    Net cash provided by (used in) investing                    
    activities                                      984,080        (366,712)   (1,232,765)

Cash flows from financing activities                            
  Proceeds from long-term debt                      287,774         395,449        21,298
  Payments made on long term debt                (1,030,116)       (445,018)     (687,223)
  Net change in lines of credit                  (5,001,951)     (3,500,000)   21,580,607
  Net advance from (payments to) officers                 -               -             -
  Proceeds from issuance of common stock                  -         218,492             -
  Deferred financing fees                          (635,954)              -             -
                                                -----------     -----------   -----------

    Net cash provided by (used in) financing                    
    activities                                   (6,380,247)     (3,331,077)   20,914,682
                                                -----------     -----------   -----------
    Net increase (decrease) in cash                (405,390)        292,395        89,961

Cash at beginning of year                           408,871         116,476        26,515
                                                -----------     -----------   -----------
Cash at end of year                             $     3,481     $   408,871   $   116,476
                                                ===========     ===========   ===========
</TABLE>                                     

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

                                      F-8
<PAGE>   42


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

   BUSINESS ACTIVITY

   The Company is a supplier of consumer fitness equipment and accessories.
   (See Note C for a discussion of discontinued operations.)

   PRINCIPLES OF CONSOLIDATION

   The consolidated financial statements include the accounts of Bollinger
   Industries, Inc.  (Bollinger) which was reincorporated in Delaware in
   September 1993, its wholly-owned subsidiaries and Bollinger Industries,
   L.P., a partnership wholly-owned by Bollinger's subsidiaries (collectively
   "the Company").  All significant intercompany accounts and transactions have
   been eliminated.

   INVENTORIES

   Inventories are stated at the lower of cost (determined on a first-in,
   first-out basis) or market (determined product by product on management
   knowledge of current market conditions and existing stock levels).

   The provision for obsolete and slow moving inventory is adjusted based on
   current inventory levels, historical and expected future sales levels.

   PROPERTY, PLANT AND EQUIPMENT

   Property, plant and equipment are stated at cost less accumulated
   depreciation and amortization.  Depreciation is computed using straight-line
   and accelerated methods for financial reporting purposes over the following
   useful lives:


       <TABLE>                                    
       <S>                         <C>            
       Buildings and improvements      5-20 years  
       Equipment                        3-7 years   
       Automobiles                        3 years     
       Furniture and fixtures           3-5 years   
       </TABLE>                                   

   Maintenance and repairs are expensed as incurred.  Major renewals and
   improvements are capitalized.

   ADVERTISING COSTS

   Advertising and promotional costs are expensed as incurred.  The advertising
   expense amounted to $1,627,464, $1,558,397, and $1,790,521 in fiscal 1997, 
   1996 and 1995, respectively.

   FAIR VALUE

   The Company believes that the carrying amounts of its current assets and
   current liabilities approximate the fair value of such items due to their
   short-term nature.  The carrying amount of long-term debt approximates its 
   fair value because interest rates approximate market.


                                      F-9
<PAGE>   43



                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE A - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES - Continued


   INCOME TAXES

   Deferred income taxes are determined using the asset and liability method,
   under which deferred tax assets and liabilities are calculated based on
   differences between financial accounting and tax basis of assets and
   liabilities.  Valuation allowances are established when necessary to reduce
   deferred tax assets to the amount expected to be realized.  Income tax
   expense or benefit is the payable or refund for the period plus or minus the
   change during the period in deferred tax assets and liabilities.

   EARNINGS (LOSS) PER COMMON SHARE

   Net earnings (loss) per common share is based on the net earnings (loss) 
   applicable to the weighted average number of common shares and common stock 
   equivalents outstanding.  Common stock equivalents include the dilutive
   effect of all stock options outstanding (except in the case of a net loss, in
   which case they would be anti-dilutive), as though they had been outstanding
   for all periods presented.

   GOODWILL AND COVENANT NOT TO COMPETE

   The excess of the purchase price of acquired companies over the fair value
   of net identifiable assets at the date of acquisition has been recorded as
   goodwill and is being amortized on a straight line basis over a twenty year
   period.  The Company periodically evaluates the net balance of goodwill
   based on the projected operating income of the respective businesses on an
   undiscounted cash flow basis.  If necessary, the goodwill would be written
   down to fair market value.

   A covenant not to compete in the amount of $206,633 net of accumulated
   amortization of $146,367 is included in "Notes receivable and other" and is
   being amortized on a straight-line basis over its duration of 41 months.

   USE OF ESTIMATES AND ASSUMPTIONS

   Management uses estimates and assumptions in preparing financial statements
   in accordance with generally accepted accounting principles.  Those
   estimates and assumptions affect the reported amounts of assets and
   liabilities, the disclosure of contingent assets and liabilities, and the
   reported revenues and expenses.  Actual results could vary from the
   estimates that were used.  In particular, the provision for chargebacks and
   buybacks is subject to estimation.  The actual chargebacks and buybacks 
   could vary from the estimate.

   REVENUE RECOGNITION AND PROVISIONS FOR CHARGEBACKS AND BUYBACKS

   The Company recognizes sales revenue at the time the products are shipped to
   its customer.  Provision is made currently for estimated product returns and
   deductions which may occur.  These returns are generally for products that
   are salable with minor reworking of packaging or replacement of missing
   components.  The provision for returns is estimated based on current trends
   and historical experience of returns.  Additionally, provision is made for 
   chargebacks from the customer for marketing programs, volume discounts and 
   other items.

                                      F-10
<PAGE>   44

                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE A - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES - Continued


   In certain circumstances, the Company has followed a "buyback" policy
   whereby the Company purchases competitors' product from a new customer in
   order to obtain shelf space for the Company's product lines.  The cost of
   such "buybacks" is amortized over  the life of the program, which typically
   has been two to three years.

   RECLASSIFICATIONS

   Certain prior year amounts have been reclassified to conform with the 1997
   presentation and to retroactively recognize the discontinued Healthcare
   Division.

   STOCK OPTIONS

   Prior to April 1, 1996, the Company accounted for its stock option plan in
   accordance with the provisions of Accounting Principles Board (APB) Opinion
   No. 25, "Accounting for Stock Issued to Employees", and related
   interpretations.  As such, compensation expense would be recorded on the
   date of grant only if the current market price of the underlying stock
   exceeded the exercise price.  On April 1, 1996, the Company adopted SFAS No.
   123, "Accounting for Stock-Based Compensation", which permits entities to
   recognize as expense over the vesting period the fair value of all
   stock-based awards on the date of the grant.  Alternatively, SFAS No. 123
   also allows entities to continue to apply the provisions of APB Opinion No.
   25 and provide pro forma net income and pro forma earnings per share
   disclosures for employee stock options grants made in 1996 and future years
   as if the fair value based method defined in SFAS No. 123 had been applied.
   The Company has elected to continue to apply the provisions  of APB Opinion
   No. 25 and provide the pro forma disclosure provisions of SFAS No. 123
   commencing in its March 31, 1997 financial statements.  The effect of
   applying the requirements of SFAS No. 123 is not considered to be material
   to the financial statements.

   ADOPTION OF NEW ACCOUNTING STANDARDS

   The Company intends to adopt SFAS No. 128, "Earnings per Share" ("SFAS 128")
   effective December 15, 1997.  This statement  requires the replacement of
   primary earnings per share with basic earnings per share and fully diluted
   earnings per share with diluted earnings per share.  Management of the
   Company does not expect the adoption of this statement will have a material
   impact on the earnings per share computation.

                                      F-11
<PAGE>   45



                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE B - ONGOING OPERATIONAL LOSSES AND LIQUIDITY

   As indicated in the accompanying financial statements, the Company has
   suffered losses of $7,441,395 and $8,223,360 during the years ended March
   31, 1997 and 1996.

   Funds provided by operating activities for fiscal 1997 were generated
   primarily by the reduction of inventory, the sale of discontinued operations
   and the receipt of an income tax refund. These funds were used to fund
   operating losses and to decrease outstanding accounts payable and long term
   debt. Management intends to further decrease inventory levels in fiscal 1998
   but does not expect the impact of those reductions to be as significant.
   Funds provided by operating activities for fiscal 1996 were generated
   primarily by an increase in accounts payable.

   In fiscal 1998, management intends to substantially improve operating gross
   margins on all product lines. Due to the highly competitive nature of the
   overseas market it has become cost advantageous to source more items from
   overseas. There are potential savings to be negotiated with steamship lines,
   freight forwarders and U.S. Customs as well as major reductions in product
   costs. The Company has actively pursued and negotiated directly with
   overseas suppliers and factories. Additionally, the domestic manufacturing
   operations have been analyzed and will be maintained only where it is cost
   advantageous to do so. The Company believes that sourcing their product from
   the lowest cost, high quality provider, in addition to strengthening the
   controls and response time surrounding customer deductions, which have been
   a drain on gross margin in fiscal 1995 and 1996, will enable it to
   substantially improve gross margin in 1998.

   The Company plans to continue to consolidate warehouse facilities in fiscal
   1998 thereby lowering fixed costs. The Company is also exploring the use of
   freight expediters on the west coast, to receive product from the orient,
   unload and inspect, and repack for shipment to the customer. The Company
   intends to reduce warehouse space, outside facilities, staffing levels and
   related overhead expenses.

   Some of these changes were implemented in late fiscal 1997 and the other
   additional improvements are continuing to be implemented in fiscal 1998.
   Management believes that based on fully implementing these plans in fiscal
   1998, and realizing the benefit of these improvements in fiscal 1998 and
   1999, the Company's operating losses will be reversed and its liquidity
   improved.

NOTE C - ACQUISITION, DISCONTINUED OPERATIONS, AND RESTRUCTURING OF OPERATIONS

   ACQUISITION

   On May 24, 1994, in exchange for 138,000 shares of its restricted common
   shares, the Company acquired substantially all of the assets and liabilities
   of NBF, Inc. (a Florida Corporation) which manufactures trampolines and
   other outdoor playground equipment.  The total consideration for the assets
   and liabilities acquired including liabilities assumed was approximately
   $2,762,472.  Additionally, for cash of $150,000, the Company acquired from
   an individual, all of the intellectual property rights to the products
   manufactured.  If the acquisition had occurred as of April 1, 1994,
   consolidated results would not have been materially effected.  The
   acquisition was accounted for as a purchase and accordingly the consolidated
   financial statements include the results of operations from the acquisition
   date.

   DISCONTINUED OPERATIONS

   The Company determined during January 1996 to dispose of its Healthcare
   Division which manufactured a line of sports medicine and safety products.
   The Company sold the largest portion of the Healthcare Division in September
   1996 with the balance sold or disposed of through January 1997.  A gain on 
   the sale of $722,676 was recorded in fiscal 1997.  Result of operations in 
   prior years have been restated to reclassify the Healthcare Division as 
   discontinued operations.

   Interest expense has been allocated to discontinued operations based on the
   proportion of average net assets of the discontinued Healthcare operations
   as compared to consolidated average net assets of the Company.

   Following is a summary of the discontinued operations:


                                      F-12
<PAGE>   46


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


<TABLE>
<CAPTION>
                                                                                YEARS ENDED MARCH 31,
                                                                       1997                   1996               1995
                                                                    ----------           ------------         ----------
<S>                                                                 <C>                   <C>                     <C>
NET SALES OF DISCONTINUED OPERATIONS:                                                    
  Healthcare Division                                               $1,398,400 (1)         $3,327,893 (2)     $5,170,521
                                                                    ----------           ------------         ----------
  Total net sales of discontinued operations                        $1,398,400             $3,327,893         $5,170,521
                                                                             -                                                  
                                                                    ==========             ==========         ==========
LOSS (GAIN) FROM DISCONTINUED OPERATIONS (PRIOR TO THE                                   
  MEASUREMENT DATE):                                                                       
  Healthcare Division                                                                      $  689,784 (2)     $  795,324
  Less: Tax (expense) benefit                                                                  97,898            270,410
                                                                                           ----------         ----------
  Net loss (gain) from discontinued operations - Healthcare                                
    Division                                                                               $  591,886         $  524,914
                                                                                           ==========         ==========
</TABLE>
                                    
  (1) April 1, 1996, to December 31, 1996 (final disposition)                 
  (2) April 1, 1995, to December 31, 1995                                      

<TABLE>
<CAPTION>
                                                                       1997                   1996                        
                                                                    ----------             ----------                     
<S>                                                                 <C>                    <C>
LOSSES ON DISPOSAL, INCLUDING PROVISION FOR OPERATING                                                                     
  LOSSES DURING PHASE-OUT PERIOD:                                                                                         
  Healthcare Division                                               $        -             $  897,574                 
  Less:  Tax benefit                                                         -                127,506                 
                                                                    ----------             ----------                     
  Net loss on disposal - Healthcare Division                        $        -             $  770,068                 
                                                                    ==========             ==========                     
OPERATING LOSSES DURING PHASE-OUT PERIOD (AFTER                                                
  MEASUREMENT DATE) APRIL 1, 1996 TO SEPTEMBER 1996:                                           
  Healthcare Division - January 1, 1996 to December 31, 1996        $        -             $1,397,574
  Less:  Tax benefit                                                         -                198,456                       
                                                                    ----------             ----------                       
  Total operating losses during phase-out period included                                                                   
  above                                                             $        -             $1,199,118                       
                                                                    ==========             ==========                       
                                                                                               
NET LOSS FROM DISCONTINUED OPERATIONS (AFTER MEASUREMENT                                       
  DATE) APRIL, 1996 TO DECEMBER 31, 1996 AND JANUARY 1,                                        
  1996, TO MARCH 31, 1996:                                                                     
  Operating loss from discontinued operations - Healthcare                                     
  Division                                                          $        -             $  497,574
  Less:  Tax benefit                                                         -                 70,656
                                                                    ----------             ----------
  Net loss from discontinued operations January 1, 1996, to                                    
  March 31, 1996                                                    $        -             $  426,918
                                                                    ==========             ==========                       
</TABLE> 

                                      F-13
<PAGE>   47


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

<TABLE>
<CAPTION>
ESTIMATED NET LOSS ON DISPOSAL OF HEALTHCARE DIVISION:                         1996
                                                                             --------
<S>                                                                          <C>          
  Estimated operating loss during phase-out period April 1,   
  1996 to December 31, 1996                                                  $900,000
  Less:  Estimated gain on sale of assets                                     500,000
                                                                             --------
                                                                              400,000
  Less: Tax Benefit                                                            56,850
                                                                             --------
  Estimated Net loss on disposal of Healthcare Division                      $343,150
                                                                             ========
                                                             
</TABLE>                                                     


<TABLE>
<CAPTION>
                                                            YEAR ENDED MARCH 31,
NET GAIN ON DISPOSAL  OF HEALTHCARE DIVISION:                     1997
                                                                --------   
<S>                                                             <C>   
  Loss during phase out period net of provision (April 1996     $      - 
  to December 1997)                                           
                                                                 722,676 
  Add:   Gain on Sale of assets                                 --------  
                                                                 722,676 
  Less: Tax expense                                              245,709
  Net gain on disposal of Healthcare Division                   $476,967
                                                                ========  
                                                                         
</TABLE>                                                        

Proceeds upon sale of the Healthcare Division were as follows; $1,418,130 in
cash and $293,547 as a note receivable.

                                      F-14
<PAGE>   48


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE C - Continued

    RESTRUCTURING OF OPERATIONS

During the fourth quarter of 1996, the Company implemented a plan ("the Plan")
to reorganize and restructure its operations.  The significant portion of this
Plan has been completed.  In accordance with the Plan, management disposed of
its Healthcare Division, and sold a significant portion of the excess inventory
which it used to reduce accounts payable and debt, and fund operations.

The Company also obtained a new credit facility.  At March 31, 1997, the
Company still has approximately $4.0 million of inventory which it intends to
sell rapidly.  The provisions for restructuring of operations at March 31, 1997
of $2,160,169 is the remaining provision against inventory identified for sale
in connection with the restructuring.


NOTE D - CONSOLIDATED STATEMENTS OF CASH FLOWS

 Supplemental disclosures are as follows:

<TABLE>
<CAPTION>
                                           YEAR ENDED MARCH 31,
                                  --------------------------------------
                                    1997          1996           1995   
                                -----------    ----------     ----------
<S>                              <C>            <C>             <C> 
Interest paid                   $ 2,470,054    $2,213,613     $1,400,146
Income taxes paid                                           
  (refund received)             $(2,100,611)   $  200,000     $  865,507
Noncash financing                                           
  and investing                                             
  transactions:                                             
Purchase of assets                                          
  financed by debt              $    66,381    $   42,488              -
Purchase of NBF, Inc.           $         -    $        -     $2,762,472
Notes receivable in                                         
  connection with sale                                      
  of Healthcare                 
  Division                      $   293,547    $        -     $        -
</TABLE>

For purposes of the Statements of Cash Flows, the Company considers all highly 
liquid debt instruments purchased with an original maturity of three months or 
less to be cash equivalents.

NOTE E - CREDIT RISK

The Company's assets which are subject to potential credit risk consist of
trade accounts receivable and cash.  The Company sells its products primarily
to retailers, including national chains, geographically dispersed throughout
the United States on an unsecured basis.  Risks associated with extension of
credit to customers are affected by the economic condition of the retail
industry.  The Company performs ongoing credit evaluations of its customers'
financial condition to reduce credit risk.  The Company has provided an
allowance for doubtful accounts which reflects its estimate of uncollectible
accounts.

Cash is at risk to the extent that it exceeds Federal Deposit Insurance
Corporation ("FDIC") insured amounts (approximately $575,000 at March 31,
1997).  To minimize risk, the Company places its cash with high credit quality
institutions.

                                      F-15

<PAGE>   49


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE F - INVENTORIES

<TABLE>
<CAPTION>
                                               MARCH 31,
                                       -------------------------
                                           1997          1996
                                       -----------   -----------
<S>                                    <C>           <C>
Raw materials                          $ 9,013,914   $ 9,858,597
Work-in-process                            328,436       305,777
Finished goods                           8,419,200    23,117,280
Reserve for Obsolescence                (1,559,770)   (1,166,766)
                                       -----------   -----------
                                        16,201,780    32,114,888
Less:  Discontinued operations - net             -     2,001,954
                                       -----------   -----------
                                       $16,201,780   $30,112,934
                                       ===========   ===========
</TABLE>

NOTE G - PROPERTY, PLANT AND EQUIPMENT


<TABLE>
<CAPTION>
                                               MARCH 31,
                                       -------------------------
                                           1997          1996
                                        ----------   ----------
<S>                                     <C>          <C>
Land, buildings and improvements        $1,915,305   $1,835,658
Equipment                                1,699,103    1,585,146
Automobiles                                 53,860       53,860
Furniture and fixtures                   1,453,910    1,238,752
                                        ----------   ----------
                                         5,122,178    4,713,416
  Less accumulated depreciation          3,038,776    2,536,135
                                        ----------   ----------
                                         2,083,402    2,177,281
  Less: Discontinued Operations - Net            -      161,999
                                        ----------   ----------
                                        $2,083,402   $2,015,282
                                        ==========   ==========
</TABLE>                                           

Depreciation expense for the years ended March 31, 1997, 1996, 
and 1995 was approximately $558,000, $554,000, and $407,000, 
respectively.

                                      F-16
<PAGE>   50


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - NOTES PAYABLE AND LONG TERM DEBT


<TABLE>
<CAPTION>
                                                             MARCH 31,
                                                      --------------------------
                                                        1997           1996
                                                      -----------    -----------
<S>                                                   <C>            <C>
Note payable under a line of credit for                              
$2,000,000 ($22,500,000 in 1996) with a bank,                        
bearing interest at the prime rate (8.50% at                         
March 31, 1997) plus 3% in 1997  (8.25% at March                     
31, 1996) plus 3% in 1996; principal and interest                    
payable monthly; collateralized by land and                          
building located in Irving, Texas in 1997                            
(collateralized by receivables and inventory in                      
1996). (1)                                            $ 1,700,000    $22,500,000

Loan with a financial institution providing a                        
maximum line of credit of $25,000,000, bearing                       
interest at the Reference Rate (8.50% at March                       
31, 1997) plus 1.75% in 1997.  Interest payable                      
monthly; collateralized by receivables and                                      
inventory.(2)                                          15,498,049              -

Notes to certain officers and shareholders of the                    
Company bearing interest at 10%, due in March                        
1998, as extended; collateralized by real estate                     
note (purchased by officers and shareholders from                    
an individual in December 1993).                          280,000        280,000

Other                                                   1,005,316        480,352
                                                      -----------    -----------
                                                       18,483,365     23,260,352

Less current portion                                    2,841,645     22,683,575

                                                      $15,641,720    $   576,777
                                                      ===========    ===========
</TABLE>

(1) The loan agreement with the bank provides that borrowings are reduced
monthly by the amount of required principal payments (approximately $25,000
per month) in terms of an agreement reached in June, 1997.   The balance is
payable on the loan expiration date of September 15, 1998.

(2) The loan agreement with the financial institution provides that borrowings
under the line of credit  are subject to limitations based on the borrowing
base, as defined in the agreement, with a maximum facility of $25.0 million.  
The terms of the agreement require the Company to maintain specific current
ratio levels, levels of debt to net worth, levels of tangible net worth and
other financial covenants as defined in the loan agreement.  At December 31,
1996 and March 31, 1997, the Company was not in compliance with all covenants.
The financial institution has waived such defaults through March 31, 1997 and
restated those covenants on a going forward basis.  At March 31, 1997 the
Company had $447,000 available in additional borrowing capacity under the loan
agreement.  The loan agreement has an extended expiration date of August 16,
2000. 


                                      F-17
<PAGE>   51

                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - NOTES PAYABLE AND LONG TERM DEBT - Continued


Future maturities of notes payable and long-term debt at March 31, 1997 are as
follows:




<TABLE>
<S>                         <C>
Year ending March 31, 1998      $ 2,841,645

                      1999        1,720,255

                      2000        1,044,099

                      2001       12,698,020

                      2002           21,203

                Thereafter          158,143
                                -----------
                                $18,483,365
                                ===========
</TABLE>

NOTE I - RELATED PARTY TRANSACTIONS

  In 1993 certain officers of the Company purchased third party notes payable
  of $500,000 with interest payable at 10% per annum (see Note H).  The
  officers assumed the same terms of the notes which matured on March 31, 1996.
  On March 29, 1996 the Company paid each of two shareholders $110,000 on the 
  notes.  The Company extended the maturity of the $100,000 note to March 31, 
  1998 and remaining notes of $180,000 to August 16, 2000.

  The Company retains a director of the Company as a consultant on certain
  matters.  Consulting fee expense recorded by the Company was $75,000 and
  $56,250 for the years ended March 31, 1997 and 1996.



NOTE J - EMPLOYEE STOCK OWNERSHIP PLAN AND 401(K) PLAN

  The Company had an employee stock ownership plan which provided for
  discretionary contributions by the Company. During 1995, the Company amended
  and restated the plan to qualify as a 401(k) employee deferred compensation
  plan under the terms of which employees who have been employed for one year
  or more are entitled to contribute up to the lesser of $9,500 or 15% of their
  annual compensation.  The Company may at its discretion contribute to the
  401(k) plan.  No Company contributions were made under either plan for any of
  the three years in the period ended March 31, 1997.

                                      F-18
<PAGE>   52



                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED


NOTE K - STOCK OPTIONS

 1991 PLAN

 The 1991 Stock Option Plan provides for options covering a total of 542,820
 common shares, all of which were issued to the Chief Executive Officer and the
 President of the Company.  The exercise price of the options granted must be
 at least 110% of the fair value of the common stock at date of grant.  The
 remaining options were exercised on March 29, 1996.  At March 31, 1997, there
 were no options outstanding or available for grant.

 Following is a summary of option activity under the 1991 Plan:



<TABLE>
<CAPTION>
                                              OPTION PRICE
                                          ---------------------
                                SHARES    PER SHARE    TOTAL
                               --------   ---------  ---------
<S>                            <C>        <C>        <C>
Outstanding at March 31, 1995   292,120     $.74795  $ 218,492
  Granted                             -           -          -
  Canceled                            -           -          -
  Exercised                    (292,120)     .74795   (218,492)
                               --------   ---------  ---------
Outstanding at March 31, 1996         -           -          -
  Granted                             -           -          -
  Canceled                            -           -          -
  Exercised                           -           -          -
Outstanding at March 31, 1997         -           -          -
                               ========   =========  =========
</TABLE>

 1993 PLAN

The 1993 Stock Option Plan provides for options covering a total of 500,000
common shares to be issued to key employees and directors other than the Chief
Executive Officer and the President.  Under the Plan, incentive stock options
(ISO's) and non-qualified stock options may be granted at prices no less than
100% and 50%, respectively, of the fair value of the Company's common stock.
Options granted expire in ten years and will generally vest in annual
installments.   At March 31, 1997, options for 246,501 shares were available
for grant.

                                      F-19
<PAGE>   53


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED


 Following is a summary of option activity under the 1993 Plan:


<TABLE>
<CAPTION>
                                                  OPTION PRICE
                                          ---------------------------- 
                                SHARES       PER SHARE        TOTAL    
                               --------   ---------------  -----------
<S>                             <C>       <C>              <C>
Outstanding at March 31, 1994   262,666   $10.00 -  12.50  $ 2,958,537
  Granted                        50,000     9.00 -  13.00      560,000
  Canceled                      (46,000)   10.00 -  12.50     (550,000)
                               --------   ---------------  -----------
Outstanding at March 31, 1995   266,666     9.00 -  13.00    2,968,537
  Granted                       110,999     3.00 -   7.50      424,621
  Canceled                     (109,666)    3.63 -  12.50   (1,148,079)
                               --------   ---------------  -----------
Outstanding at March 31, 1996   267,999     3.00 -  13.00    2,245,079
  Granted                       110,000      .56 -   6.00      329,439
  Canceled                     (124,500)     .56 -  12.50     (644,877)
                               --------   ---------------  -----------
Outstanding at March 31, 1997   253,499   $  .56 -  13.00  $ 1,929,641
                               ========   ===============  ===========
</TABLE>

  All the options are considered compensatory.  The outstanding stock options
  expire from November 1999 through January 2003.

The following summarizes information about compensatory options outstanding at
March 31, 1997:


<TABLE>
<CAPTION>
                             Options Outstanding                                  Options Exercisable
                                          Weighted Avg.
Range of Exercise                          Remaining          Weighted           Number       Weighted Avg.
Prices             Number Outstanding   Contractual Life  Avg. Exercise Price  Exercisable   Exercisable Price
-----------------  ------------------   ----------------  -------------------  -----------   -----------------
<S>                    <C>                    <C>              <C>                <C>            <C>         
$0.56-$13.00           253,499               2.59 Years        $7.48              87,715         $10.30
</TABLE>         

The options granted in Fiscal 1997, 1996 and 1995 have exercise prices which
approximate fair value and accordingly, no compensation cost has been
recognized for compensatory stock options in the consolidated financial
statements.
                                                  

                                      F-20
<PAGE>   54


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - INCOME TAXES

     Income tax expense (benefit) from continuing operations consists of the
following:


<TABLE>
<CAPTION>                                               
                1997        1996         1995     
              --------  ------------  ---------- 
<S>           <C>       <C>             <C>         
Federal                                          
  Current    $ 137,331  $ (2,031,628) $ 848,220  
  Deferred    (245,709)      891,354   (497,804) 
State           16,414         5,176          -  
             ---------  ------------  --------- 
             $ (91,964) $ (1,135,098) $ 350,416  
             =========  ============  =========  
</TABLE>

 The Company's effective income tax rate from continuing operations differed
 from the Federal statutory rate as follows:

<TABLE>
<CAPTION>
                                              YEARS ENDED MARCH 31,
                                            -------------------------
                                             1997     1996     1995
                                            -------  -------  -------
<S>                                         <C>      <C>      <C>
U.S.  Federal statutory rate                 34.0 %   34.0 %    34.0%
Amortization of goodwill                      (.3)%    (.5)%     1.8%
Meals and entertainment                       (.1)%    (.1)%      .9%
Change in prior tax estimates                 2.3 %    (.7)%       -
Valuation allowance                         (35.4)%  (17.6)%       -
Other, net                                   (0.4)%    (.9)%      .4%
                                            -----    -----    ------
                                              0.1 %   14.2 %    37.1%
                                            =====    =====    ======
</TABLE>


                                      F-21
<PAGE>   55


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED

Following are the components of deferred tax assets and deferred tax
liabilities:


<TABLE>
<CAPTION>
                                                  MARCH 31,          
                                          -----------------------    
                                              1997         1996      
                                          ------------  ---------    
<C>                                       <C>           <C>          
Net current deferred tax assets                                      
  Inventories                             $   463,534   $ 753,188    
  Allowance for doubtful accounts             179,129      96,110    
  Inventory reserves                          376,171       3,208    
  Accrued expenses                             67,895      42,500    
  Provision for discontinued operation              -     136,000    
  Less valuation allowance                 (1,086,729)   (964,697)   
                                          -----------   ---------
                                          $         -   $  66,309    
                                          ===========   =========    
Noncurrent deferred tax assets                                       
  Net operating loss                      $ 3,724,596   $ 725,917    
  Less valuation allowance                 (3,677,150)   (725,917)   
                                          -----------   ---------    
                                          $    47,466   $       -    
Noncurrent deferred tax liabilities                                  
  Accumulated depreciation                $   (47,446)  $ (66,309)   
Net Noncurrent deferred taxes             $         -   $ (66,309)   
                                          ===========   =========    
</TABLE>                             

At March 31, 1997, the Company has net operating losses available to offset
future taxable income of approximately $10,950,000 which begin expiring in
2011.  The valuation allowance increased by $3,073,265 during the year ended
March 31, 1997.


NOTE M - MAJOR CUSTOMERS

Customers accounting for 10% or more of total net sales from continuing
operations are as follows:

YEAR ENDED MARCH 31,  
<TABLE>
<CAPTION>
                      PERCENTAGE
                      ----------
<S>                   <C>
1997
    KMart                38%
    Wal-Mart             34%

1996
    KMart                31%
    Wal-Mart             25%

1995
    KMart                32%
    Wal-Mart             13%
</TABLE>


                                      F-22
<PAGE>   56


                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED


NOTE N - COMMITMENTS AND CONTINGENCIES

The Company leases certain manufacturing and warehouse space; manufacturing 
and computer equipment; and other items.  These leases are operating leases 
and have future minimum lease payments, excluding sublease income, as follows:


<TABLE>
<CAPTION>
YEAR
----
<S>         <C>
1998          $1,125,757
1999             879,809
2000             330,887
2001              65,000
2002              65,000
Thereafter       672,000
              ----------
              $3,138,453
              ==========
</TABLE>

Total lease expense for the years ended March 31, 1997, 1996, and 1995 was 
approximately $1,449,000,  $1,552,000 and $793,000, respectively.


The Company, certain of its officers and directors, former officers, former 
independent auditor, and the underwriters of the Company's initial IPO are 
defendants in certain shareholder lawsuits.  The Company believes the lawsuits 
are without merit.  However, if the plaintiffs prevail, the lawsuits could 
have a material adverse effect on the Company.  The Company is unable to
estimate the range of loss, if any.

The Company filed a lawsuit against Denise Austin on December 2, 1996 in
the 162nd District Court of Dallas County, Texas and was subsequently removed
to the United States District Court for the Northern District of Texas, Dallas
Division Case Number 3-97-CV-0246-G on February 6, 1997.  Subsequently a suit
was filed on December 30, 1996, by Denise Austin in the United States District
Court, Eastern District of Virginia.  The suit was filed for payment of
royalties alleged to be due of approximately $655,000. The Company has accrued 
all amounts which it believes may be due.

In the normal course of business, the Company is involved in various 
litigation. Management believes that the aggregate effect of any liability
arising from such items would not be material to the consolidated statements of
operations or financial position at March 31, 1997.


                                      F-23
<PAGE>   57



         REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SCHEDULE





BOARD OF DIRECTORS AND STOCKHOLDERS
BOLLINGER INDUSTRIES, INC. AND SUBSIDIARIES

In connection with our audit of the consolidated financial statements of
Bollinger Industries, Inc. and Subsidiaries referred to in our report dated
June 16, 1997, we have also audited Schedule II for the years ended March 31,
1997, 1996 and 1995.  In our opinion, this schedule presents fairly, in all
material respects, the information required to be set forth therein.




                                                  King Griffin & Adamson PC


Dallas, Texas
June 16, 1997



                                      F-24
<PAGE>   58


                                                                     Schedule II
                  BOLLINGER INDUSTRIES, INC.  AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS

                   YEARS ENDED MARCH 31, 1995, 1996 AND 1997



<TABLE>
<CAPTION>                                                  ADDITIONS                             
                                         ------------------------------------------- 
                                         Balance at      Charged to         Charged  
                                         beginning       costs and          to other                          Balance at       
         Description                      of year         expenses          accounts         Deductions       end of year
------------------------------           -----------  ----------------      --------         ----------       -----------
<S>                                     <C>              <C>                   <C>           <C>               <C>
Year ended March 31, 1995
  Allowance for doubtful                
    accounts                            $ 476,675        $ 793,931             $   -          $(350,391)       $  920,215
  Inventory obsolescence reserve          112,217          852,204                 -           (163,449)          800,972

Year ended March 31, 1996                                                                                               
  Allowance for doubtful                                                                                                
    accounts                            $ 920,215        $(311,514)            $   -          $(150,872)       $  457,829
  Inventory obsolescence reserve          800,972          365,794                 -                  -         1,166,766

Year ended March 31, 1997                                                                                               
  Allowance for doubtful                                                                                                
    accounts                            $ 457,829        $ 464,407             $   -          $ (77,924)       $  844,312

Inventory obsolescence reserve          1,166,766          585,900                 -           (192,896)        1,559,770
</TABLE>                                                                     

Note - Deductions represent uncollectible accounts or inventories written off.



                                      F-25
<PAGE>   59
                                EXHIBIT INDEX

                                                                  

<TABLE>
<CAPTION>
       EXHIBITS                                                          
       --------
<S>    <C>
 3.1 - Certificate of Incorporation of the Company (incorporated by reference to
       Exhibit 3.1 to the Company's Form S-1 Registration Statement No. 
       33-69708)

 3.2 - By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the 
       Company's Form S-1 Registration Statement No. 33-69708)

 4.1 - Form of certificate representing shares of the Company's Common Stock 
       (incorporated by reference to Exhibit 4.1 to the Company's Form S-1 
       Registration Statement No.  33-69708)

10.1 - Bollinger Industries 1993 Stock Option Plan (incorporated by reference 
       to Exhibit 10.1 to the Company's Form S-1 Registration Statement No.
       33-69708)

10.2 - Bollinger Industries Employee Stock Ownership Plan and Trust 
       (incorporated by reference to Exhibit 10.2 to the Company's Form S-1 
       Registration Statement No.  33-69708)

10.3 - Form of Indemnification Agreement with independent director 
       (incorporated by reference to Exhibit 10.3 to the Company's Form S-1 
       Registration Statement No. 33-69708)

10.4 - Bollinger Industries, Inc. 1991 Incentive Stock Option Plan 
       (incorporated by reference to Exhibit 10.4 to the Company's Form S-1 
       Registration Statement No.  33-69708)

10.5 - Lease Agreement dated April 4, 1991, between William A. McCarty, Jr., 
       and Elinor F. McCarty and Bollinger Sports, Inc., formerly known as 
       Bollinger Industries, Inc. ("Bollinger-Texas")(incorporated by 
       reference to Exhibit 10.8 to the Company's Form S-1 Registration 
       Statement No. 33-69708)

10.6 - Assignment and Assumption Agreement dated as of October 1, 1993, 
       between Bollinger-Texas as Assignor and Bollinger Industries, L.P., as 
       Assignee with respect to such lease (incorporated by reference to 
       Exhibit 10.8.1 to the Company's Form S-1 Registration Statement No. 
       33-69708)

10.7 - Lease Agreement dated August 30, 1992, between Reba McPherson, 
       individually and as Trustee of the Reba McPherson Trust u/w/o Harold 
       Lynn McPherson, and Tarbox, Inc., as extended by an Agreement dated 
       August 9, 1993 (incorporated by reference to Exhibit 10.9 to the 
       Company's Form S-1 Registration Statement No. 33-69708)
</TABLE>


                                      II-1
<PAGE>   60
<TABLE>
<CAPTION>
        EXHIBITS                                                          
        --------
<S>     <C>
10.8  - Assignment and Assumption Agreement dated as of October 1, 1993, 
        between Tarbox, Inc., as Assignor and Bollinger Industries, L.P., as 
        Assignee with respect to such lease (incorporated by reference to 
        Exhibit 10.9.1 to the Company's Form S-1 Registration Statement No. 
        33-69708)

10.9  - Standard Industrial Lease dated March 17, 1993, between National Life 
        Insurance Company and Bollinger-Texas (incorporated by reference to 
        Exhibit 10.10 to the Company's Form S-1 Registration Statement No.  
        33-69708)

10.10 - Assignment and Assumption Agreement dated as of October 1, 1993, 
        between Bollinger-Texas as Assignor and Bollinger Industries, L.P., as
        Assignee with respect to such lease (incorporated by reference to 
        Exhibit 10.10.1 to the Company's Form S-1 Registration Statement No.  
        33-69708)

10.11 - $500,000 Real Estate Lien Note dated March 18, 1993, in favor of Sid 
        Reisman and executed by Bollinger-Texas, as modified by a Renewal, 
        Extension, and Modification Agreement dated as of April 6, 1993, and 
        subsequently assigned to Glenn, Bobby and Dell Bollinger (incorporated
        by reference to Exhibit 10.10 to the Company's Form S-1 Registration 
        Statement No. 33-69708)

10.12 - Asset Purchase and Sale Agreement dated as of September 13, 1993, by 
        and between California Gym Equipment Company, S. G. Equipment, Inc. 
        and, for limited purposes, Bollinger-Texas and Sherman Grider 
        (incorporated by reference to Exhibit 10.13 to the Company's Form S-1
        Registration Statement No.  33-69708)

10.13 - Standard Sublease dated as of September 13, 1993, between California 
        Gym Equipment Company and S. G. Equipment, Inc., together with the 
        Industrial Real Estate Lease dated June 1, 1992, between New England 
        Mutual Life Insurance Company and Bollinger-Texas attached thereto 
        (incorporated by reference to Exhibit 10.14 to the Company's Form S-1 
        Registration Statement No.  33-69708)

10.14 - Assignment and Assumption Agreement dated as of September 1, 1993, 
        between Bollinger-Texas and California Gym Equipment Company with 
        respect to Industrial Real Estate Lease dated June 1, 1992 
        (incorporated by reference to Exhibit 10.15 to the Company's Form S-1 
        Registration Statement No.  33-69708)

10.15 - Letter agreement dated May 19, 1992, between Bollinger-Texas, Denise 
        Austin and Jeff Austin (incorporated by reference to Exhibit 10.16 to 
        the Company's Form S-1 Registration Statement No.  33-69708)
</TABLE>


                                      II-2
<PAGE>   61
<TABLE>
<CAPTION>
        EXHIBITS                                                          
        --------
<S>     <C>
10.16 - Letter agreement dated April 13, 1994, between Bollinger Industries, 
        L.P., Denise Austin and Jeff Austin (incorporated by reference to 
        Exhibit 10.16 to the Company's form 10-K for the fiscal year ended 
        March 31, 1994)

10.17 - Endorsement Agreement dated September 1, 1993, between Bollinger-Texas
        and Nolan Ryan (incorporated by reference to Exhibit 10.17 to the 
        Company's form 10-K for the fiscal year ended March 31, 1994)

10.18 - Loan Agreement dated as of January 4, 1994, between Bollinger 
        Industries, L.P., the Company, and First Interstate (incorporated by 
        reference to Exhibit 10.18 to the Company's form 10-K for the fiscal 
        year ended March 31, 1994)

10.19 - Standard Office/Warehouse Lease dated May 11, 1994, between Fountain 
        Parkway, Ltd., and Bollinger Industries, L.P. (incorporated by 
        reference to Exhibit 10.19 to the Company's form 10-K for the fiscal 
        year ended March 31, 1994)

10.20 - Lease dated December 21, 1990, between Americus/Sumter Payroll 
        Development Authority and N.B.F., Inc.  and R.  Wayne Rich 
        (incorporated by reference to Exhibit 10.20 to the Company's form 10-K 
        for the fiscal year ended March 31, 1994)

10.21 - Assignment and Assumption of Lease dated May 1, 1994, between 
        Americus/Sumter Payroll Development Authority, NBF, Inc., a Florida 
        corporation, and NBF, Inc., a Georgia corporation (incorporated by 
        reference to Exhibit 10.21 to the Company's form 10-K for the fiscal 
        year ended March 31, 1994)

10.22 - Amendment to Lease between Americus-Sumter Payroll Development 
        Authority and NBF, Inc., a Georgia corporation and R. Wayne Rich 
        amending the lease dated December 21, 1990 reflected at exhibit No. 
        10.20 above (incorporated by reference to Exhibit 10.2 to the Company's
        form 10-Q for the quarter ended June 30, 1994)

10.23 - Asset Purchase Agreement dated May 24, 1994, and effective as of May 1,
        1994, between NBF, Inc., a Florida corporation, and NBF, Inc., a 
        Georgia corporation (incorporated by reference to Exhibit 10.3 to the 
        Company's form 10-Q for the quarter ended June 30, 1994)

10.24 - First Amendment to Loan Agreement dated as of June 22, 1994, between 
        Bollinger Industries, L.P., the Registrant, Bollinger Holding Corp., 
        NBF and First Interstate Bank of Texas, N.A.  (incorporated by 
        reference to Exhibit 10.5 to the Company's form 10-Q for the quarter 
        ended June 30, 1994)
</TABLE>


                                      II-3
<PAGE>   62
<TABLE>
<CAPTION>
        EXHIBITS                                                          
        --------
<S>     <C>
10.25 - Loan and Security Agreement dated September 9, 1994, between Bollinger
        Industries, L.P. and NationsBank of Texas, N.A. (incorporated by 
        reference to Exhibit 10.1 to the Company's form 10-Q for the quarter 
        ended September 30, 1994)

10.26 - First Amendment to Loan and Security Agreement dated September 9, 1994,
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A.  
        (incorporated by reference to Exhibit 10.2 to the Company's form 10-Q 
        for the quarter ended September 30, 1994)

10.27 - Second Amendment to Loan and Security Agreement dated December 8, 1994,
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A.  
        (incorporated by reference to Exhibit 10.1 to the Company's form 10-Q 
        for the quarter ended December 31, 1994)

10.28 - Lease Agreement dated November 16, 1994, between John Wilkerson, 
        individually and Bollinger Industries (incorporated by reference to 
        Exhibit 10.2 to the Company's form 10-Q for the quarter ended December
        31, 1994)

10.29 - Modification and Ratification of Lease dated November 1, 1994, between
        Fountain Parkway, Ltd.  and Bollinger Industries, L.P. (incorporated 
        by reference to Exhibit 10.3 to the Company's form 10-Q for the quarter
        ended December 31, 1994)

10.30 - Third Amendment to Loan and Security Agreement dated March 3, 1995 
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A. 
        (incorporated by reference to Exhibit 10.30 to the Company's Form 10-K
        for the fiscal year ended March 31,1995)

10.31 - Fourth Amendment to Loan and Security Agreement dated May 15, 1995 
        between Bollinger Industries, L.P.  and NationsBank of Texas, N.A. 
        (incorporated by reference to Exhibit 10.31 to the Company's Form 10-K
        for the fiscal year ended March 31, 1995)

10.32 - Modification and Ratification of Lease dated February 22, 1995, between
        Fountain Parkway, Ltd.  and Bollinger Industries, L.P. (incorporated by
        reference to Exhibit 10.32 to the Company's Form 10-K for the fiscal 
        year ended March 31, 1995)

10.33 - Fifth Amendment to Loan and Security Agreement dated September 9, 1995,
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A. 
        (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q 
        for the quarter ended December 31, 1995)
</TABLE>


                                      II-4
<PAGE>   63
<TABLE>
<CAPTION>
        EXHIBITS                                                          
        --------
<S>     <C>
10.34 - Sixth Amendment to Loan and Security Agreement dated December 29, 1995,
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A. 
        (incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q 
        for the quarter ended December 31, 1995)

10.35 - Seventh Amendment to Loan and Security Agreement dated March 8, 1996,
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A.
        (incorporated by reference to Exhibit 10.35 to the Company's Form 10K 
        for the year ended March 31, 1996)

10.36 - Eighth Amendment to Loan and Security Agreement dated May 8, 1996, 
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A. 
        (incorporated by reference to Exhibit 10.36 to the Company's Form 10K 
        for the year ended March 31, 1996)

10.37 - Deed of Trust, Assignment, Security Agreement and Financing Statement 
        dated May 8, 1996, between Bollinger Industries, L.P. and NationsBank 
        of Texas, N.A. (incorporated by reference to Exhibit 10.37 to the 
        Company's Form 10K for the year ended March 31, 1996)

10.38 - Ninth Amendment to Loan and Security Agreement dated May 17, 1996, 
        between Bollinger Industries, L.P. and NationsBank of Texas, N.A.
        (incorporated by reference to Exhibit 10.38 to the Company's Form 10K 
        for the year ended March 31, 1996)

10.39 - Amended and Restated Promissory Note dated March 29, 1996, between 
        Bollinger Industries, L.P., and Glenn D. Bollinger (incorporated by 
        reference to Exhibit 10.39 to the Company's Form 10K for the year 
        ended March 31, 1996)

10.40 - Amended and Restated Promissory Note dated March 29, 1996, between 
        Bollinger Industries, L.P., and Bobby D. Bollinger (incorporated by 
        reference to Exhibit 10.40 to the Company's Form 10K for the year 
        ended March 31, 1996)

10.41 - Amended and Restated Promissory Note dated March 29, 1996, between 
        Bollinger Industries, L.P., and Dell Bollinger (incorporated by 
        reference to Exhibit 10.41 to the Company's Form 10K for the year 
        ended March 31, 1996)

10.42 - Second Amendment to standard industrial lease dated January 31, 1996, 
        between National Life Insurance Company and Bollinger Industries, L.P.,
        as assignee (incorporated by reference to Exhibit 10.42 to the Company's
        Form 10K for the year ended March 31, 1996)

10.43 - U.S. Trademark License Agreement between International Apparel 
        Marketing Corp. dba Nautilus Wear International and Bollinger 
        Industries, Inc. dated May 1, 1995 (incorporated by reference to 
        Exhibit 10.43 to the Company's Form 10K for the year ended March 31, 
        1996)

10.44 - Amendment to U.S. Trademark License Agreement between International 
        Apparel Marketing Corp. and Bollinger Industries, Inc. dated March 1, 
        1996 (incorporated by reference to Exhibit 10.44 to the Company's
        Form 10K for the year ended March 31, 1996)

</TABLE>


                                      II-5
<PAGE>   64
<TABLE>
<CAPTION>
        EXHIBITS                                                          
        --------
<S>     <C>
10.45 - Intercreditor and Subordination Agreement dated May 8, 1996, between
        NationsBank of Texas, N.A. and Glenn D. Bollinger, Bobby D. Bollinger, 
        and Dell Bollinger (incorporated by reference to Exhibit 10.45 to the 
        Company's Form 10K for the year ended March 31, 1996)

10.46 -  Eleventh Amendment to Loan and Security Agreement dated July 8, 1996,
        between Bollinger Industries, L.P., and NationsBank of Texas, N.A.
        (incorporated by reference to Exhibit 10.46 to the Company's form 10-Q
        for the quarter ended September 29, 1996)

10.47 - Loan and Security Agreement dated August 16, 1996 between Bollinger
        Industries, Inc., Bollinger Industries, L.P. and NBF, Inc. and 
        Foothill Capital Corporation and related schedules. (incorporated by 
        reference to Exhibit 10.47 to the Company's form 10-Q for the quarter 
        ended September 29, 1996)

10.48 - Collateral Assignment of Patents and Trademarks dated August 16, 1996
        between Bollinger Industries, L.P. and Foothill Capital Corporation.
        (incorporated by reference to Exhibit 10.48 to the Company's form 10-Q 
        for the quarter ended September 29, 1996)

10.49 - Subordination Agreement dated August 16, 1996 between Glenn D.
        Bollinger, Bobby D. Bollinger, Dell Bollinger and Foothill Capital 
        Corporation. (incorporated by reference to Exhibit 10.49 to the 
        Company's form 10-Q for the quarter ended September 29, 1996)

10.50 - Deed of Trust dated August 16, 1996 executed by Bollinger Industries,
        L.P. (incorporated by reference to Exhibit 10.50 to the Company's form 
        10-Q for the quarter ended September 29, 1996)

10.51 - Asset Purchase Agreement dated August 29, 1996 between Bollinger
        Industries, L.P., and Rehab Plus Therapeutic Products, Inc. 
        (incorporated by reference to Exhibit 10.51 to the Company's form 10-Q 
        for the quarter ended September 29, 1996)

10.52 - Tenth Amendment to Loan and Security Agreement dated July 8,1996,
        between Bollinger Industries, L.P., and NationsBank of Texas, N.A.
        (incorporated by reference to Exhibit 10.1 to the Company's form 10-Q 
        for the quarter ended June 30, 1996)

10.53 - Asset Purchase Agreement dated August 29, 1996 between Bollinger
        Industries, L.P., and Rehab Plus Therapeutic Products, Inc. 
        (incorporated by reference to Exhibit 2.01 to the Company's form 10-Q 
        for the quarter ended September 29, 1996)

10.54 - Asset Purchase Agreement dated November 7, 1996, between Bollinger
        Industries, L.P., and SST Acquisition Corporation (incorporated by 
        reference to Exhibit 2.01 to the Company's form 10-Q for the quarter 
        ended December 29,1996)

10.55 - First Amendment to Loan and Security Agreement dated August 16, 1996,
        between Bollinger Industries, Inc., Bollinger Industries, L.P. and NBF,
        Inc. and Foothill Capital Corporation.

10.56 - Second Amendment to Loan and Security Agreement dated August 16, 1996,
        between Bollinger Industries, Inc., Bollinger Industries, L.P. and NBF,
        Inc. and Foothill Capital Corporation.

10.57 - Lease Agreement dated December 1, 1996 between Southwest Properties
        Group, Inc. and Bollinger Industries, L.P.

11.1  - Statement re Computation of Per Share Data

21.1  - List of the Company's subsidiaries (incorporated by reference to 
        Exhibit 21.1 to the Company's Form 10-K for the fiscal year ended 
        March 31,  1995)

27.1  - Financial Data Schedule
</TABLE>


                                      II-6