<PAGE>

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

                                   FORM 10-KSB


(Mark One)

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

For the fiscal year ended DECEMBER 31, 1997
                          -----------------

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934  [NO FEE REQUIRED]


For the transition period from _______________to______________

Commission file number :  0-17287
                         --------

                              GLOBAL OUTDOORS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

              ALASKA                                    33-0074499  
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

          43445 BUSINESS PARK DR. SUITE 113, TEMECULA, CALIFORNIA 92590
          -------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (909) 699-4749
                                                    ---------------

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

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

                                  COMMON STOCK
         --------------------------------------------------------------
                                (Title of Class)

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


<PAGE>


         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         State issuer's revenues for its most recent fiscal year $6,309,417.

         State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days.

         On December 7, 1998, 928,027 shares of voting Common Stock were held by
non-affiliates of the registrant. On Said date the aggregate market value of
such Common Stock was $1,972,057.

                         (ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS)

         Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as latest practicable date:

                                              Number of Shares Outstanding
               Class                              at December 7, 1998          
-------------------------------------    ---------------------------------------
           Common Stock                                4,253,749


                      DOCUMENTS INCORPORATED BY REFERENCES

         If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424 (b) or (c) under the Securities Act of 1933 ("Securities
Act"). The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for the fiscal year ended
December 24, 1990).

         None.

         Transitional Small Business Disclosure Format (check one):

         Yes [ ]   No [X]


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

INTRODUCTORY

The following information includes forward-looking statements. Actual results
could differ materially.


GENERAL

         Global Outdoors, Inc. (the "Company" or "Global") is the principal
owner of The Outdoor Channel, Inc. which owns and operates The Outdoor Channel
("The Outdoor Channel" or "Channel"), the first national television network
devoted primarily to traditional outdoor activities, such as hunting, fishing,
shooting sports, rodeo and recreational gold prospecting. Launched as a
part-time network in June 1993, The Outdoor Channel progressed to a full-time
channel in April 1994 and since then has continued to develop its management,
programming, distribution and revenue. The Company also owns and operates
related businesses which serve the interests of viewers of The Outdoor Channel
and other outdoor enthusiasts. These related businesses include, LDMA-AU, Inc.
("Lost Dutchman's"), Gold Prospectors' Association of America, Inc. ("GPAA") and
the Trips Division. Lost Dutchman's is a national recreational gold prospecting
campground club with over 5,000 members and properties in California, Oregon,
Alaska, Nevada, Arizona, Colorado, Georgia, North Carolina and South Carolina.
GPAA is the largest recreational gold prospecting club in the world with
approximately 35,000 active members. GPAA also sells products and services
related to recreational gold prospecting and is the publisher of the Gold
Prospector magazine. The Company's Trips Division sponsors unique recreational
prospecting trips to California's Motherlode area and to the Company's 2300 acre
camp, located 11 miles west of Nome, Alaska. In February 1995, the Company
acquired 100% of GPAA, the shareholders of which are Global's principal
shareholders, for 2,500,000 shares of Common Stock valued at $8,750,000 and
potential Earn Out Shares (See "Certain Transactions"). At the time of the
acquisition, GPAA in addition to its other interests owned The Outdoor Channel.
The Company was incorporated in Alaska on October 22, 1984. Effective July 23,
1996, the Company changed its name to Global Outdoors, Inc. from Global
Resources, Inc. to better reflect the nature of the Company's business.


BUSINESS STRATEGY

         The Company's principal business strategy is for The Outdoor Channel to
establish a position as a leading provider of entertainment programming relating
to traditional outdoor activities and for the Company to leverage that position
as a means to market and sell its products and services. Key elements of the
Company's business strategy are as follows:

         INCREASE THE OUTDOOR CHANNEL'S CARRIAGE ON CABLE TELEVISION SYSTEMS:
The Outdoor Channel intends to increase its carriage on cable television systems
by continuing to provide quality programming on The Outdoor Channel and by
increasing the public's awareness and name recognition of The Outdoor Channel
through intensified public relations and marketing efforts targeting cable
operators and potential subscribers.

         MARKET AND SELL PRODUCTS AND SERVICES TO OTHER SPECIALTY OR NICHE
MARKETS: Based on a long term programming and advertising agreement with The
Outdoor Channel, the Company intends to utilize The Outdoor Channel to market
and sell outdoor-related products to specialty or niche markets in addition to
recreational gold prospecting, including hunting, fishing and camping. The
Company intends to leverage The Outdoor Channel's increased distribution and
name recognition to market and sell such products and services to those viewers
who identify The Outdoor Channel and related products and services with quality
and integrity.


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         INCREASE ADVERTISING REVENUE AND SUBSCRIBER FEES DERIVED FROM THE
OUTDOOR CHANNEL: The Company believes that as the distribution of The Outdoor
Channel increases, the Channel will be able to increase its advertising rates
and increase subscriber fees from cable operators.

         INCREASE THE NUMBER OF OFFERED RECREATIONAL ACTIVITIES: The Company
intends to increase the number of recreational activities offered to members of
GPAA, Members of Lost Dutchman's and customers of the Trips Division, including
hunting, fishing and camping. In addition, the Company may establish new clubs
based on these new activities and may acquire new properties to serve as
campgrounds where members can engage in such activities.


THE OUTDOOR CHANNEL

         The Outdoor Channel, Inc. ("The Outdoor Channel") was incorporated
under the laws of the State of Nevada on December 10, 1990, under the name Gold
News Network, Inc., as a wholly owned subsidiary of GPAA. Initially, the GPAA
produced the "Gold Prospector Show." In early 1993, due to the success of the
Gold Prospector Show GPAA., decided to launch a satellite television network.
Not wanting to limit the scope of the incipient channel to gold prospecting, it
was decided to name the channel, The Outdoor Channel. To reflect the diversity
of programming The Outdoor Channel had achieved, in July 1994, the Channel's
incorporated name was changed to The Outdoor Network, Inc. In December 1996, the
incorporated name was changed to its present name, The Outdoor Channel, Inc.

         In November 1997, The Outdoor Channel added two outside members to its
Board of Directors and in December 1997, the Company instituted a plan to make
The Outdoor Channel self supporting. Since that time the Company has not
advanced significant funding to the Channel with The Outdoor Channel supporting
itself primarily with its increasing revenues and outside investor funds. As of
November 15, 1998, the Company owned approximately 88% of the Common Stock of
The Outdoor Channel. The Company believes that the Channel is close to attaining
cash flow break-even. However, there can be no assurance that The Outdoor
Channel will achieve cash flow break-even.

         The Outdoor Channel is a premier provider of a full range of quality
programming related to traditional outdoor activities and is one of the only
television networks whose programming specifically targets the interests and
concerns of millions of persons interested in traditional outdoor activities.
The Outdoor Channel provides the Company, as well as other advertisers, with a
cost effective means to promote goods and services to a large, focused and
rapidly expanding market. In addition, The Outdoor Channel affords cable
operators the opportunity to both attract subscribers from a significant market
segment not specifically targeted by other programming services and respond to
viewers' demands for more outdoor-related programming.


 DISTRIBUTION AND CABLE SUBSCRIBERS

         The Outdoor Channel's programming is offered mainly by means of
satellite and through contractual relationships with operators of cable
television systems and broadcast stations. The Company estimates that
approximately 66 million households in the United States have cable television
and that the large C-Band satellite dish ("C-Band") market has attracted another
5 million households. In addition, "wireless cable" ("MMDS"), new video systems
presently being built by telephone companies and the continued development of
direct-broadcast satellite ("DBS") companies provide additional opportunities
for the Company to distribute The Outdoor Channel. The Company believes that The
Outdoor Channel can currently be viewed by approximately 9 million households.

         The Outdoor Channel transmits all of its programs from its production
facility located in Temecula, California by means of a master control room that
is linked via fiber optic cable to an earth station transmitting antenna (an
"uplink"), which The Outdoor Channel leases under a service agreement. The
uplink facility transmits The Outdoor Channel's programming signal over an
orbiting PanAmSat Galaxy 9 satellite transponder to cable system headend
receiving antennae and satellite dishes throughout the United States and Canada.
The Outdoor Channel has editing equipment at its production facility which is


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used to assemble programs that are produced in-house, edit acquired programming
and insert advertising spots. The Channel also has several filming sets at its
production facility from which some of its in-house programming is produced.
Commencing October 1, 1998, The Outdoor Channel switched from PanAmSat Galaxy 1R
satellite to PanAmSat Galaxy 9 satellite pursuant to an end of life satellite
lease which is anticipated to run 12 to 15 years. From March 1997 to October
1998, The Outdoor Channel had been transmitting its signal via Galaxy 1R
satellite, are both Galaxy 1R and Galaxy 9 are in "cable neighborhoods" in that
they are satellites that are occupied or intended to be occupied by cable
networks.

         The Outdoor Channel is available through approximately 1,200 affiliated
cable systems in a total of approximately 2.7 million cable households and is
available to approximately 6.3 million C-Band and broadcast households. The
Outdoor Channel is not dependent on one or a few multiple cable system operators
("MSOs") due to the numerous different cable systems carrying The Outdoor
Channel. The Company believes that it will be able to enter into more
affiliation agreements in the future as a result of increased installation of
new cable distribution systems and the expected significant expansion of channel
capacity of existing cable systems. In addition, the Company intends to continue
its promotional activities, such as attending regional and local cable trade
shows, in order to increase cable industry awareness of The Outdoor Channel. The
Company has reserved the right to encrypt its signal requiring satellite viewers
to purchase subscriptions.

         DBS providers, such as EchoStar, DirecTv and Prime Star represent an
additional, although smaller, means of potential distribution of The Outdoor
Channel. The Outdoor Channel believes that distribution by means of DBS will
increase as market acceptance and the installed base of DBS subscribers
increase. The Outdoor Channel has entered into a DBS distribution agreement with
EchoStar and was launched on EchoStar's Dish Network in December 1998. The
Channel was launched as part of the Dish Network's Action Plus package. At this
time, The Outdoor Channel does not know the number of Dish Network subscribers
it will reach.

         The Outdoor Channel has explored international distribution of its
programming. The Outdoor Channel has applied for or received trademarks in
various foreign countries including Canada, France, Taiwan, Hong Kong,
Australia, New Zealand, Germany and The United Kingdom. The Outdoor Channel has
no present agreements for international distribution but will consider
opportunities as they become available.


ADVERTISING

         The Company derived approximately $1.6 million in advertising revenue
for the year ended December 31, 1997, from cash sales of advertising time on The
Outdoor Channel and publications such as the Gold Prospector magazine. The
Company anticipates that it will continue to derive a substantial portion of its
revenue from the sale of products and services to specialty or niche markets;
however, the Company is also focusing its efforts on attracting national and
local advertisers who are interested in reaching these markets. The Outdoor
Channel engages in advertising transactions under which The Outdoor Channel
acquires programming from third parties in exchange for a portion of the
advertising time within such programming. The Company does not recognize any of
this exchange advertising as revenue.

         The Company believes that advertising on The Outdoor Channel is
attractive to advertisers because it allows them to execute both a general
market strategy of reaching more cable television viewers and a target market
strategy of reaching consumers interested in outdoor-related activities. The
Company believes that over the past 15 years, cable television has captured a
greater share of advertising budgets and that during this period, the overall
appeal for the major networks (ABC, CBS and NBC), and for local broadcast
stations, has declined, while over the same period the overall appeal for basic
cable television programming services has increased. Because quality of
viewership is a significant factor in determining both advertisers' placement
strategy and the pricing of advertising time, cable advertising revenues have
grown significantly faster during this period than those of broadcast networks.


                                      -5-
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         In addition, the Company believes that The Outdoor Channel will benefit
from the trend in advertising strategies toward greater market segmentation. The
Company believes that a significant number of major national advertisers of
outdoor-related products and services are dedicating a larger share of their
advertising budgets to target the consumer interested in outdoor-related
activities, in an effort to increase their share of this large and rapidly
growing market. Industry sources estimate that the outdoor life-style market is
currently worth approximately $190 billion yearly worldwide. Therefore, the
Company believes that advertisers, including manufacturers and providers of
outdoor-related products and services, will increasingly advertise on The
Outdoor Channel because it will provide them with a cost effective means to
reach a significant number of consumers interested in outdoor-related
activities. The Outdoor Channel has numerous advertisers including Troy-Bilt,
Pradco, Sears, Sprint, AT&T, Bushnell Sports Optics and Sorel Boots.

         Advertising time on The Outdoor Channel is marketed and sold by The
Outdoor Channel's advertising sales department. The Outdoor Channel also
utilizes the services of independent sales representatives. The Company intends
to increase the size of its advertising sales staff in 1998.


PROGRAMMING

         The Outdoor Channel's programming is focused on providing
entertainment, education, consumer values and a balanced approach to the use of
outdoor natural resources. The Outdoor Channel produces its programs with the
outdoor enthusiast in mind, often after considering suggestions and
recommendations of its viewers. Therefore, The Outdoor Channel believes that its
programming, as opposed to its competitors' programming, accurately represents
the values and interests of the outdoor community.

         The Outdoor Channel acquires programs from independent film and
television production companies and produces gold prospecting related and other
programs utilizing in-house staff and facilities. The Outdoor Channel exhibits
the acquired productions pursuant to licensing agreements with suppliers who
generally own the copyrights to such programming. The Outdoor Channel has no net
programming costs, as such costs are underwritten by the producers. Licenses to
air acquired programming generally run for a calendar quarter to one year and
entitle The Outdoor Channel to show each episode several times. Examples of
programming acquired from third parties include "America's Outdoor Journal,"
"In-Fisherman," and "American Archer."

         In 1998, the Company plans to produce and acquire additional
programming for The Outdoor Channel which the Company believes will enable it to
obtain greater distribution and increase advertising rates. In addition, the
Company plans to offer additional programming which will be of interest to a
wider demographic.


MARKETING

         In December 1997, the Company entered a ten year contract with The
Outdoor Channel whereby the Company has the rights to ten hours of programming
time and thirty sixty second advertising spots per week. The Company has the
option to renew this contract for two five year periods. Because it owns other
outdoor-related businesses, The Outdoor Channel affords the Company the unique
opportunity to market and sell its own outdoor-related products and services. As
the Channel achieves greater name recognition and distribution, the Company
anticipates that it will be able to increase sales of its products and services,
as well as the sale and exclusive distribution of products produced by third
parties. However, there can be no assurance that this will be the case. The
Company believes this contract is presently beneficial to The Outdoor Channel,
but in the future will constitute a significant asset of the Company.

         Outdoor-related products and services currently marketed by the Company
on The Outdoor Channel include those of Lost Dutchman's, GPAA and the Trips
Division.


                                      -6-
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         The Outdoor Channel has entered into several cross marketing agreements
with outdoor related publications and organizations that have recognized the
value of advertising time on the Channel. This provides the Channel with a very
effective means of increasing consumer awareness and demand for The Outdoor
Channel.

         LOST DUTCHMAN'S

         Lost Dutchman's is a national recreational gold prospecting campground
club, with campgrounds in California, Oregon, Alaska, Nevada, Arizona, Colorado,
Georgia, North Carolina and South Carolina. Lost Dutchman's currently has over
5,000 members. Lost Dutchman's memberships cost up to $4,500 with annual dues
presently set at $96; however, significant discounts are available to those
members who purchase memberships at Company sponsored outings or trade shows.

         Lost Dutchman's members are entitled to use any of the fourteen
campgrounds owned by the Company or by an affiliated organization, pursuant to a
mutual use agreement between the Company and such organization. Members are
entitled to keep all gold found while prospecting on any of the Company's
properties. The Company is committed only to those duties which would be
required as an absentee owner of raw land, such as the payment of property
taxes. Eight of the properties have a caretaker which the Company has been able
to retain at a minimal monthly expense advance which averages about $525 per
month. The caretaker's job it is to provide minor repairs and maintenance such
as keeping the weeds down, cleaning bathrooms and other facilities, if any, and
generally taking care of the property and the campers. It is worthy of note that
in the past when a major improvement has been made to a property such as a
building, a clubhouse or road that Lost Dutchmans members have contributed both
labor and materials towards its construction so that the Company had very little
cost in the project. It is the Company's intention to actively acquire and
develop additional recreational properties and to add recreational facilities
and improvements at current camps.

         In addition to advertising on The Outdoor Channel, the Company markets
Lost Dutchman's memberships by advertising at trade conventions and in the Gold
Prospector Magazine published by the Company. In addition, the Company targets
the 150,000 former and present members of GPAA as well as participants in the
Trips Division's expeditions as potential members of Lost Dutchman's. As funds
are available, the Company intends to purchase additional properties for use by
Lost Dutchman's members and to intensify its marketing efforts to recruit new
Lost Dutchman's members.

         GPAA

         GPAA is the largest recreational gold prospecting club in the world,
with approximately 40,000 active members. In addition, GPAA publishes and sells
the Mining Guide, which contains detailed information on mining claims
comprising approximately 100,000 acres and is updated annually, as well as the
bi-monthly Gold Prospector magazine, which has a distribution of approximately
70,000 copies. GPAA also operates gold prospecting trade shows and conventions,
from which the Company derives revenue from admissions and booth rentals, and
sells recreational gold prospecting-related merchandise, including gold pans,
hats, jackets and belt buckles.

         GPAA's initial memberships cost $67.50. Members are entitled to receive
a 14" gold pan, an annual subscription to the Gold Prospector magazine, an
annual subscription to the quarterly Pick & Shovel Gazette, the GPAA Mining
Guide which currently contains over 500 pages of information and Prospecting
Permit as well as related merchandise. Annual renewal membership fees range from
$20 to $59. The Company markets and advertises GPAA memberships and products on
The Outdoor Channel. GPAA also produces the Gold Fever television show which
airs on The Outdoor Channel, as well as, several other selected markets. GPAA
also owns approximately 50 hours of original programming of the Gold Prospectors
Show which the Company intends on re-editing and airing on The Outdoor Channel.


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         THE TRIPS DIVISION

         The Trips Division offers unique recreational gold prospecting trips to
residents of the United States and Canada. The principal trip offered by the
Trips Division is the annual trip to Alaska, the fees for which are up to $1,950
per week and $950 per additional week, that include round-trip transportation to
and from Seattle, Washington. The Alaska Trip crew usually arrives in early June
with the camp closing in mid August. The Alaskan expedition begins in Nome,
Alaska where participants are taken to the Company's 2,300-acre camp on the
Cripple River adjacent to the Bering Sea. In 1997, the Alaska trip had
approximately 430 participants, and the Company expects that the number of
participants will increase in the future due to the Company's increased
advertising and marketing efforts on The Outdoor Channel, as well as
advertisements in the Gold Prospector magazine and on the Gold Prospectors' Show
and Gold Fever Show.

         The Trips Division also offers the Mother Lode Expedition in September
and October. The destination of the Mother Lode Expedition is the heart of the
historic motherlode area in central California. Participation is generally
limited to 20 persons per week with a weekly fee of $950. In 1997, due to
demand, the normally three week trip was expanded to four weeks with a total of
90 participants. Due to the size of the Motherlode Expedition camp site, it is
not anticipated that this trip will be significantly expanded. As circumstances
and opportunities warrant, the Company will consider offering trips to other
locations.


COMPETITION

         There is intense competition for viewers among companies providing
programming services via cable television and through other video delivery
systems. More than 120 programming services are currently distributed nationwide
by satellite to cable systems. The Outdoor Channel competes for advertising
revenues with other national cable programming services, broadcast networks,
local over-the-air television stations, broadcast radio and the print media. The
Outdoor Channel's closest direct competitors are the Outdoor Life Network and to
a lesser extent, The Nashville Network and ESPN. The Outdoor Channel believes
that while its closest competitor has a similar name there is a substantial
difference between the two networks. The Outdoor Channel emphasizes traditional
outdoor activities such as fishing and hunting while the other networks features
a significant amount of outdoor competitive sports and nature observation. The
Outdoor Channel believes that its closest competitor is well funded and well
connected but believes this benefits The Outdoor Channel since it will serve as
a barrier to competition for future programmers in this niche. More generally,
The Outdoor Channel competes with various other leisure-time activities such as
home videos, movie theaters, and other alternative forms of information and
entertainment.

         The Outdoor Channel also competes for available channel space on cable
television systems with other cable programming services and nationally
distributed and local television stations.

         Increased competition in the cable industry may result from
technological advances, such as digital compression, which allows cable systems
to expand channel capacity, and "multiplexing," which allows programming
services to offer more than one feed of their programming. As a result of the
increased segmentation made possible by these advances, other programming
services might be able to provide programming that targets the Company's viewing
audience.

         The Outdoor Channel has positioned itself with cable operators as the
lower cost provider in its niche. The Company believes that The Outdoor Channel
is receiving higher advertising rates than its closest competitor due to a
higher percentage of viewership. The Company believes that it has an advantage
over its competitors in attracting advertisers of outdoor-related products and
services because the Company, unlike its competitors, broadcasts The Outdoor
Channel to approximately 5 million direct to home satellite receivers and offers
its advertisers exposure through a programming format which focuses exclusively
on the traditional outdoor lifestyle of hunting, fishing, camping and related
outdoor activities. In addition, while developments such as digital compression
and new distributors in the cable marketplace may have the effect of increasing
competition for The Outdoor Channel, they also create tremendous potential for
additional distribution for the network.


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         The Company is not aware of any other company that is in direct
competition for the type of recreational activity it provides through the Alaska
Trip. Global believes it has an advantage in promoting its trip in Alaska due to
its association with the GPAA and its ability to utilize the Gold Prospector
magazine, The Outdoor Channel and the Company's gold shows. Persons planning an
Alaska gold prospecting venture would be expected to evaluate other camps in
Alaska, as well as the option of undertaking a trip not associated with a group.
The table below lists the approximate number of participants in the "Alaska
Trip" since 1991 by Global.

              Year             Participants
              ----             ------------
              1991                 220
              1992                 215
              1993                 579
              1994                 538
              1995                 369
              1996                 378
              1997                 430

         In a broad sense, the Company's "Alaska Trip" is an expedition for
study in Alaskan geology with equal emphasis on the educational and recreational
aspects of this far northern property. Its competition thus includes other
sources of recreational activities.

         While Lost Dutchman's has numerous campground competitors, it is the
only campground club the Company is aware of that has a theme, namely gold
prospecting. It has been estimated that there are approximately 15,000
campgrounds in the United States of which approximately 600 are membership
campgrounds such as Lost Dutchman's. For instance, there is Thousand
Trails/NACO, Outdoor World and Thousand Adventures. It is believed that these
companies compete primarily by quality of facilities and amenities offered. By
contrast, Lost Dutchman's has rustic facilities and few amenities and seeks to
attract persons who are interested in gold prospecting, hands on outdoor
activities and wish to be part of a club.


EMPLOYEES

         As of December 31, 1997, the Company, not including The Outdoor
Channel, had a total of 29 employees of which 26 were full time and The Outdoor
Channel had a total of 15 employees all of which were full time. The Company
also engages the services of additional employees during the Alaskan trip
offered by the Trips Division. During 1997, the Company engaged the services of
approximately eight such seasonal employees. None of the Company's employees is
covered by a collective bargaining agreement. The Company considers its
relationship with its employees to be good.


GOVERNMENT REGULATION

         The Company's operations are subject to various government regulations.
The operations of cable television systems, satellite distribution systems and
broadcast television program distribution companies are subject to the
Communications Act of 1934, as amended, and to regulatory supervision thereunder
by the Federal Communications Commission (the "FCC"). The Company's leased
uplink facility in Perris, California is licensed by the FCC and must be
operated in conformance with the terms and conditions of that license. Cable
systems are also subjected to local franchise authority regulation.

         LOCAL CABLE REGULATION

         The cable television industry is regulated by municipalities or other
local government authorities which have the jurisdiction to grant and to assign
franchises and to negotiate generally the terms and conditions of such
franchises, including rates charged to subscribers, except to the extent that
such jurisdiction is preempted by federal law. Any such rate regulation could
place downward pressure on the potential subscriber fees to be earned by the
Company.

                                      -9-
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         FEDERAL CABLE REGULATION

         In 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which provides, among other
things, for a "must carry" regime for local broadcast stations (which requires
the mandatory carriage of certain broadcast stations and payments by cable
operators to other broadcast stations for retransmission of their signals in
some instances), for channel positioning rights for certain local broadcast
stations, for limits on the size of MSOs, for limits on carriage by cable
systems and other video distributors of affiliated program services, for a
prohibition on programmers in which cable operators have an "attributable
interest" from discriminating between cable operators and their competitors, or
among cable operators, and for increased competition in video programming
distribution (both within the cable industry and between cable and competing
video distributors). In addition, the 1992 Cable Act requires the FCC to
establish national guidelines for the rates that cable operators subject to rate
regulation may charge for basic cable service and certain other services and to
establish guidelines for determining when cable programming may not be provided
exclusively to cable system operators. Various cable operators have initiated
litigation challenging certain aspects of the 1992 Cable Act. The
constitutionality of the basic scheme of rate regulation under the 1992 Cable
Act has been upheld by a federal district court, and the FCC's regulation rules
were upheld by a federal appeals court in June 1995. The outcome of the balance
of this litigation cannot be predicted. However, Congress passed and the
President signed in March 1996 the most comprehensive rewrite of
telecommunications law since the Communications Act of 1934, reversing or
modifying many of the provisions of the 1992 Act. Among other things, the
legislation allows cable and telephone industries into each other's markets and
eliminates federal cable rate regulation, immediately for small systems and
within three years for large operators. The Company believes these developments
are very positive for The Outdoor Channel, as they will result in significantly
expanded channel capacity, new distributors to whom the Company can market the
network, and new pressures on cable operators to launch new programming
services, both for competitive reasons and because they will once again be able
to recover the costs of new programming through rate actions.

         LOST DUTCHMAN'S REGULATIONS

         To operate its campgrounds, the Company must comply with discretionary
permits or approvals issued by local governments under local zoning ordinances
and other state laws. In addition, to construct improvements at campgrounds, the
Company has usually been required to obtain permits such as building and
sanitary sewage permits. Some states in which the Company sells memberships have
laws regulating campground memberships. These laws sometimes require
comprehensive disclosure to prospective purchasers. Some states have laws
requiring the Company to register with a state agency and obtain a permit to
market. The Company has undertaken a comprehensive program to ensure compliance
with applicable laws in all 50 states.

         OTHER REGULATIONS

         In addition to the regulations applicable to the cable television and
campground industries in general, the Company is also subject to various local,
state and federal regulations, including, without limitation, regulations
promulgated by federal and state environmental, health and labor agencies. The
Company's mining clubs and Trips Division are subject to various local, state
and federal statutes, ordinances, rules and regulations concerning, zoning,
development, and other utilization of its properties.

INTELLECTUAL PROPERTY

         The Company neither holds nor depends upon any material patent,
trademark, license or other proprietary right except "The Outdoor Channel(R)"
which is a registered trademark of The Outdoor Channel.


                                      -10-
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTIES.

         Information with respect to the location and general character of
Global's materially important properties is as follows.


CRIPPLE RIVER

         The Cripple River property which now includes the Arctic Creek property
consists of approximately 2300 patented (*See definition of "patented," below)
acres and is located in the Cape Nome area of Alaska. The Cripple River property
is the principal destination of the "Alaska Trip" participants. It is the former
location of a large historic gold mining operation. The Company has constructed
over 130 rooms on the property for trip participants. Also, Global has
constructed a chow hall, Saloon (non-alcoholic), general store, gold recovery
plant, small commercial gold mining plant, drinking and wastewater treatment
facilities and other buildings. In addition to recreational gold mining, the
Cripple River property has excellent fishing including yearly runs of pink and
silver salmon.


LOUD MINE

         The Loud Mine is located in White County, Georgia, near the eastern end
of Georgia's famous Dahlonega Gold Belt, which stretches diagonally (southwest
to northeast) across the north end of the state. The camp's office is staffed
with a caretaker. Campground facilities include a clubhouse, bathrooms, showers
and a dump station. Camping is available for 250 or more persons. Approximately
one-third mile of Town Creek and one of its smaller tributaries meander through
this 38 deeded acre property. Dredges of up to 4" intake may be used in Town
Creek. Highbanking, sluicing and panning also are popular. Deep layers of
alluvial gravels, separated by dense clay layers, overlay soft bedrock
(saprolite) throughout this region. Numerous gold-bearing quartz veins run
through the Loud Mine property. Some "Loud" gold is smooth, but coarse gold is
mostly found, indicating that it is still relatively close to its source.


STANTON PROPERTY

         The Stanton property consists of 35 patented acres and is located
approximately 50 miles northwest of Phoenix, Arizona. It is contiguous with 85
acres owned by an affiliated organization with which Global has a mutual use
agreement. Either on Global's property or the other organization's property
there are sanitary facilities, showers, club house, pool room, card room,
library, kitchen area with sink, water and electric outlets, 65 sites for
hookups and parking for several hundred self contained units. The camp's office
is staffed with a caretaker. Gold is present throughout the property from
surface to bedrock. The Stanton camp is presently only partially open while
significant sanitary facility and other improvements are being made. It is
anticipated that this camp will reopen by the end of 1998.


                                      -11-
<PAGE>


BURNT  RIVER/ CAVE CREEK

         The Burnt River Camp consists of 135 patented acres and the adjacent
Cave Creek property consists of 32 patented acres. These properties are located
in eastern Oregon and have a clubhouse, sanitary facilities, dump station,
restrooms, showers and a caretaker who lives on site. There is dredging and
excellent Highbanking along the Burnt River. The Cave Creek property is a
slender parcel of land that takes in about one mile of Cave Creek, providing
abundant ground for recreational prospecting.


VEIN MOUNTAIN CAMP

         The Vein Mountain Camp, located in West Central North Carolina
approximately 7 miles from the town of Marion, was acquired in February 1996.
The Camp consists of 130 deeded acres located in the middle of North Carolina's
motherlode. Between 1829 and 1830 seven pound nuggets were reported to have been
taken from the property. During the same era a 28 pound nugget and 200 pound
mass of gold and quartz were reported to have been taken within several miles of
the property. There presently are some improvement to the property including two
pole barns, outhouse and telephone. Vein mountain has a caretaker who lives on
site. Future plans include bathrooms, showers, water and a clubhouse. Completion
of some improvements is estimated in 1 to 2 years. There is camping for up to
250 self-contained recreational vehicles.


JUNCTION BAR PLACER

         The Junction Bar Placer is located at the confluence of the Klamath and
Scott Rivers in northern California. Fourteen of the property's 26 acres of
patented land are zoned Highway Commercial. With frontage on both Highway 96 and
Scott River Road, this property has excellent development potential. Future
plans include bathrooms, showers, water and a clubhouse. Global has begun to
develop the Junction Bar Placer. Global has conducted a survey of the property
as well as contracted an architect to draw plans for a campground facility.
Approximately $9,000 was expended on the project in 1992. Global commenced work
on obtaining local approval to construct facilities in 1995. The camp will only
be constructed as funds permit. Junction Bar Placer has a caretaker who lives on
site. Completion of some improvements is estimated in 1 to 2 years.


OCONEE CAMP

         The Oconee Camp, located in the northwest corner of South Carolina and
just north of Walhalla, was acquired in June 1995. This camp consists of 120
acres of deeded property. Oconee is a primitive campground with minimal
facilities including twelve sites for hookups, outhouse and telephones. Oconee
has a caretaker who lives on site. Future plans include bathrooms, showers,
water and a clubhouse. Completion of some improvements is estimated in 1 to 2
years. There is Camping for up to 250 self-contained recreational vehicles.


LEADVILLE PROPERTY

         The Leadville property, located in Lake County, Colorado was acquired
in August 1995. The camp is comprised of approximately 60 patented acres in the
heart of Colorado's historic mining area. At over 11,000 feet in elevation, it
has spectacular scenery including views of the two highest peaks in Colorado.
This is a primitive campground with no facilities. Future plans include
bathrooms, showers and a clubhouse. Completion of future improvements is
dependent upon obtaining local regulatory approval. If the Company continues to
have problems obtaining local regulatory approval, it will dispose of this
property. There is camping for up to 200 self-contained recreational vehicles.


                                      -12-
<PAGE>


AMERICAN CREEK

         The American Creek claims consist of five U.S. Federal mining claims in
the Cape Nome area of Alaska. There are certain improvements and mining
equipment thereon including a bucket line gold dredge, machine shop and
airstrip. The dredge was partially operated in the summer of 1988, more fully
operated in 1989 and due to mechanical problems only partially operated in
1990-1992 and has not operated since that time. Operations are not anticipated
for 1998. In 1989 the Dredge produced approximately 8.5 ounces of gold with
Global's share being 2.5 ounces and trip participants dividing up 6 ounces. In
1990 the Dredge produced a small and undetermined amount of gold which was
divided up entirely among the Dredge Crew. The Dredge produced no gold in 1988
and 1991. The Dredge Crew also had the opportunity to operate small gold
recovery machines at American Creek in 1989, 1991 and 1992. In 1998, it is
anticipated that only experienced Dredge Crew members will work at American
Creek and will perform limited exploration work on the claims.


OMILAK SILVER MINE

         The Omilak Silver Mine consists of approximately 40 acres of patented
land and is located about 80 miles northeast of Nome, Alaska. The property has
on it previously existing equipment, mine shafts, rail and mine cars and several
buildings including a two-story bunk house constructed by Global. The Omilak
Silver Mine, in addition to recreational uses, has the potential for being
reactivated as a commercial silver mine. At such time, as Global has sufficient
resources, the price of silver warrants and Global believes it is timely, the
Company may evaluate the Omilak property for commercial use.


HIGH DIVIDE PROPERTY

         The High Divide property consists of 20 acres of patented land and is
located in Esmeralda County, Nevada. This property is remote and there are no
facilities. It was patented for lode mining but placer gold is present in the
area.


NEDERLAND PROPERTY

         The Nederland property consists of 5 patented acres located in Boulder
County, Colorado. There are no facilities on this property. The area around the
Nederland property has produced over 1 million ounces of gold since 1858. This
property has mostly silver with small amounts of gold.


*        Patented land is United States public land that has been transferred to
         private fee simple ownership. Mining claims can be perfected into
         patented land which is what occurred on some of the Company's
         properties before the Company acquired those properties.


ITEM 3.  LEGAL PROCEEDINGS.

         From time to time Global is a party to litigation arising in the normal
course of its business, none of which existing on the date hereof in the opinion
of management will have a material effect on Global's operations or financial
position.


                                      -13-
<PAGE>


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

(a)      Not Applicable.

(b)      Not Applicable.

(c)      Not Applicable.

(d)      Not Applicable.


                                      -14-
<PAGE>


                                     PART II

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

         Global's Common Stock is listed for trading on the NASD's over the
counter Bulletin Board under the trading symbol "GLRS". The following table sets
forth for the quarters indicated the reported high and low closing sales prices.
 .

                                                  High             Low
                                                  ----             ---

1996  First Quarter                               5.75             4.62
      Second Quarter                              5.50             3.75
      Third Quarter                               5.00             3.75
      Fourth Quarter                              5.00             1.75

1997  First Quarter                               4.25             1.62
      Second Quarter                              4.25             1.88
      Third Quarter                               3.25             1.50
      Fourth Quarter                              3.75             2.00

         On September 12, 1994, Global effected a 2 for 1 forward split of its
Common Stock. On March 4, 1992, Global effected a 1 for 20 reverse split of its
Common Stock. Share amounts and prices herein have been restated to reflect the
foregoing splits. On May 1, 1989, Global distributed a special Common Stock
dividend payable at the rate of one share of Common Stock for every ten shares
of Common Stock held.

         Shareholders who purchased Common Stock before the aforementioned stock
splits and dividend need to be mindful that their holdings have been adjusted to
reflect these splits and dividend.

         In October 1991, February 1993, April 1994, November 1995, December
1996 and December 1997, Global authorized paying a dividend payable in Common
Stock to Global's Preferred Stockholders to satisfy Global's preferred dividend
obligation for the years 1991, 1992, 1993, 1994, 1995 and 1996.

         No other dividends have been declared with respect to Global's common
shares since inception. Global intends on paying the 10% stock dividend to the
holders of its Preferred Stock as of December 31, 1997, in 1998 payable at the
rate of one share of Common Stock for each ten shares of Preferred stock held
for an aggregate Common Stock dividend of approximately 6,068 shares of Common
Stock. It is not likely Global will pay any cash dividends in the foreseeable
future. Global intends to reinvest earnings, if any, in its operations.

         There is presently one market maker for the Preferred Stock issued in
Global's second public offering. At present, Global has 60,675 shares of
Preferred Stock outstanding. Each share of Preferred Stock is convertible to 1
share of Common Stock which conversion would afford greater liquidity for a
Preferred shareholder.

         In February 1997, Global commenced a public offering of Units
consisting of two shares of Common Stock and one Class F Warrant to purchase
Common Stock. The public offering was suspended by the Company in October 1997,
with 52,034 Units being sold at $8.00 per Unit for a total of $416,276. In 1997,
Global also issued 9,600 shares of Common Stock to various persons for services
rendered to the Company.

         As of approximately August 5, 1998, Global had 1078 shareholders of
record of its Common Stock and 208 shareholders of its Preferred Stock.


                                      -15-
<PAGE>


ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS.

         The following information includes forward-looking statements, the
realization of which may be impacted by certain factors discussed in Item I.
Description of Business-Important Factors Related to Forward-Looking Statements
and Associated Risks.


GENERAL

         Global Outdoors, Inc. (the "Company" or "Global") is the principal
owner of The Outdoor Channel, Inc. which owns and operates The Outdoor Channel
("The Outdoor Channel" or "Channel"), the first national television network
devoted primarily to traditional outdoor activities, such as hunting, fishing,
shooting sports, rodeo and recreational gold prospecting. The Company also owns
and operates related businesses which serve the interests of viewers of The
Outdoor Channel and other outdoor enthusiasts. These related businesses include,
LDMA-AU, Inc. ("Lost Dutchman's"), Gold Prospectors' Association of America,
Inc. ("GPAA") and the Trips Division. Lost Dutchman's is a national recreational
gold prospecting campground club with over 5,000 members and properties in
California, Alaska, Oregon, Nevada, Arizona, Colorado, Georgia, South Carolina
and North Carolina. GPAA is the largest recreational gold prospecting club in
the world with approximately 35,000 active members. GPAA also sells products and
services related to recreational gold prospecting and is the publisher of the
Gold Prospector magazine. Prior to being a wholly-owned subsidiary of the
Company, GPAA was an affiliated company which owned the Outdoor Channel. As
discussed below, the Company acquired 100% of the stock of GPAA in February
1995. The Company's Trips Division sponsors unique recreational prospecting
trips to the historic Mother Lode area of California and to the Company's 2300
acre camp, located 11 miles west of Nome, Alaska.

         The Company has been selling its GPAA club memberships since its
incorporation in 1984. From 1968 to 1984, GPAA memberships were sold by the
proprietorship owned by the Company's founders. GPAA membership sales took a
marked upswing in 1992 in conjunction with the airing of the "Gold Prospector
Show," a show the Company has owned and produced since 1990. During 1992, the
"Gold Prospector Show" was broadcast on various television and cable channels,
for which the Company purchased air time. In 1993, GPAA launched The Outdoor
Channel and, since then, broadcasts of the "Gold Prospector Show" and related
sales of GPAA memberships have occurred almost exclusively on The Outdoor
Channel. The Company intends that The Outdoor Channel be used as a primary
vehicle to promote the Company's services and products and anticipates that it
will be a factor in the future growth of GPAA, Lost Dutchman's and the Trips
Division. In that regard, the Company entered into a long term contract with The
Outdoor Channel whereby the Company has the rights to ten hours of programming
time and thirty sixty second advertising spots per week.

         On February 10, 1995, Global acquired 100% of the stock of GPAA in
exchange for 2,500,000 shares of its Common Stock and potential Earn Out Shares
(See "Certain Transactions"). For accounting purposes, the assets of GPAA are
recorded at their historical cost basis in a manner similar to a pooling of
interest.

         Although The Outdoor Channel is not aligned with any sizable
entertainment or cable company, as are many emerging channels, it has, to date,
achieved substantial visibility in the cable industry. The Outdoor Channel is
committed to converting visibility for the Channel's programming into greater
distribution into cable households. Greater distribution will allow The Outdoor
Channel to charge higher advertising rates, command higher subscriber fees from
cable affiliates, attract more advertisers and receive greater revenues for the
Company's products.

         In September 1997, The Outdoor Channel executed a contract with the
National Digital Television Center, Inc. DBA "Headend In The Sky" ("HITS"), a
wholly owned subsidiary of Tele-Communications Inc. ("TCI"). HITS is a digitally
compressed programming service available to cable systems. The Outdoor Channel
launched on HITS in October of 1997. The Company expects The Outdoor Channel to
receive a significant amount of distribution from HITS although the amount is
limited by the number of digital receivers installed by cable systems and by
their HITS channel selections.


                                      -16-
<PAGE>


         In October 1997, The Outdoor Channel signed a national carriage
agreement with TCI, one of the two largest multiple system operators (" MSOs")
in the U.S. The Company believes there will be significant distribution of The
Outdoor Channel on TCI systems.

         In December 1997 and November 1998, The Outdoor Channel renewed its
media placement agreement with Frederiksen Television, Inc. for the placement of
direct response programming on The Outdoor Channel, primarily during off hours.
The Outdoor Channel receives significant revenues under this agreement.

         In April 1998, The Outdoor Channel signed an affiliation agreement with
EchoStar Satellite Corporation ("EchoStar"), one of the largest direct broadcast
satellite companies ("DBS") in the U.S. with approximately two million
subscribers. The Outdoor Channel's launch on EchoStar's Dish Network occurred in
December 1998. The Outdoor Channel was launched as part of the Dish Network's
Action Plus package. The Channel does not know the level of distribution it will
receive on the Dish Network.

         In April 1998, The Outdoor Channel signed a cross promotion agreement
with the Wild Life Fund of America ("WLFA"). The WLFA is affiliated with groups
representing approximately 1.5 million sports men and women and will be
encouraging them to request The Outdoor Channel. The Outdoor Channel will be
co-producing with the WLFA a new show "In the Crosshairs" which will discuss
hunters and anglers' rights. The Outdoor Channel is also promoting memberships
in the WLFA. Cross promotion agreements with the WLFA and other similar
organizations give The Outdoor Channel a very effective means to increase viewer
awareness and demand for The Outdoor Channel at no net cash cost to the Channel.

         In August 1998, The Outdoor Channel signed a national carriage
agreement with Time Warner Cable, a division of Time Warner Entertainment
Company ("Time Warner"), one of the two largest MSOs in the U.S. The Company
believes there will be significant distribution of The Outdoor Channel on Time
Warner systems.

         A primary objective of the Company is for The Outdoor Channel to obtain
distribution. To accomplish this objective the Channel seeks to sign national
carriage agreements with MSOs and thereafter carriage agreements with the MSOs'
individual cable affiliates. Efforts to obtain distribution for The Outdoor
Channel to date have largely been focused on areas where there are the greatest
number of outdoor enthusiasts, mainly in rural areas of the United States. In
November 1998, The Outdoor Channel was launched on approximately 1,300 cable
systems with approximately 2.6 million subscribers. The Outdoor Channel is under
contract with or has signed national carriage agreements with over 70 of the top
100 multi-system cable operators representing over 40 million potential
households. In addition, the Channel is in active negotiations with many other
cable operators. The Company believes that the Channel will be able to enter
into more affiliation agreements in the future as a result of increased
installation of new cable distribution systems and the expected significant
expansion of channel capacity of existing cable systems. The Outdoor Channel
intends to continue its promotional activities, such as attending regional and
local cable trade shows, in order to increase cable industry awareness of The
Outdoor Channel.

         In November 1997, the Company commenced a restructuring of The Outdoor
Channel. The Board of Directors of The Outdoor Channel was expanded and two
cable industry executives, Ray V. Miller and Elizabeth Sanderson-Burke, were
added. Mr. Miller is a cable industry pioneer. He has served as President of 17
cable television companies. Mr. Miller has been a Director of the National Cable
Television Cooperative ("NCTC") since 1991. Mr. Miller is a past officer of the
California Cable television Association and the North Carolina Cable Television
Association. He is a member of the "Cable Television Pioneers." Ms. Burke has
been the president of several communications companies. Ms. Burke was on the
Board of Directors of the National Cable Television Cooperative ("NCTC") from
1993 to 1996. She earned a B.A. degree from the College of Colorado and a law
degree from Pepperdine University.


                                      -17-
<PAGE>


         In November 1997, The Outdoor Channel made several other management
changes. Andrew J. Dale was promoted to President and Chief Operating Officer
and Jacob J. Hartwick was promoted to Executive Vice President. The Outdoor
Channel also added advertising and financial executives and replaced other
personnel. In December 1997, the Company instituted a plan to make The Outdoor
Channel self supporting. Since that time the Company has not advanced
significant funds to the Channel with The Outdoor Channel supporting itself
primarily with its revenues and outside investor funds. The Outdoor Channel
raised $1,383,000 from private investors from December 1997 through the closing
of the placement on October 31, 1998, at which time, the Company owned
approximately 88% of The Outdoor Channel. The Company believes that the Channel
will be close to attaining cash flow break even in the fourth quarter of 1998.
However, there can be no assurance that the Channel will achieve cash flow break
even operations then or ever.

         Since July 30, 1997, the Company's Common Stock has been traded on the
NASD's over the counter Bulletin Board. Price quotes on the Company's Common
Stock can be obtained from any stockbroker. Also, price quotes can be obtained
from a number of other sources including internet sites on American On Line,
Yahoo Finance and Paww's Financial Network.

         In February 1997, Global commenced a public offering of Units
consisting of two shares of Common Stock and one Class F Warrant to purchase
Common Stock. The public offering was suspended by the Company in October 1997,
with 52,034 Units being sold at $8.00 per Unit for a total of $416,272.


COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996

         REVENUES. The Company's revenues include revenues from advertising
fees, GPAA and Lost Dutchman's membership sales, product sales and the Trips
Division sales. Advertising fees result from the sale of advertising time on The
Outdoor Channel and from advertising space in publications such as the Gold
Prospector magazine. Revenues for the year ended December 31, 1997 were
$6,309,417, an increase of $1,051,409 or 20%, compared to revenues of $5,258,008
for the year ended December 31, 1996. This increase was primarily the result of
increases in four items of revenue. Advertising revenue increased substantially
to $1,563,985 for the year ended December 31, 1997 compared to $960,462 for the
year ended December 31, 1996, due primarily to an increase in advertising
revenue at The Outdoor Channel. Merchandise sales were $767,308 for the year
ended December 31, 1997, compared to $488,973 for the year ended December 31,
1996, due to the Company's significant efforts in its merchandise sales
division. Revenue from the Trips Division was up notably at $1,027,354 for the
year ended December 31, 1997 compared to $828,901 for the year ended December
31, 1996, due to increased participation on the Alaska Trip and the
significantly increased participation on the Motherlode Expedition. Gain on the
sale of subsidiary stock was $363,660 for the year ended December 31, 1997,
compared to $0 for the year ended December 31, 1996, due to the Company selling
approximately 4% of The Outdoor Channel Common Stock to outside investors with
no such sales occurring in 1996. On the other hand, Membership sales decreased
to $2,569,018 for the year ended December 31, 1997, compared to $2,910,447 for
the year ended December 31, 1996, due primarily to lower sales of Lost
Dutchman's memberships. Despite management devoting significant time and
resources to increasing distribution and revenues for The Outdoor Channel,
during 1997, the Company increased its sales for the Alaska Trip and increased
revenue in its merchandise sales division. However, the lack of resources to
expand and improve Lost Dutchman's properties impacted Lost Dutchman's
membership sales.

         EXPENSES. Expenses consist primarily of the cost of the Company's
satellite transponder and uplink facilities, programming, advertising and
promotion, sales and administrative salaries, office expenses and general
overhead. Expenses for the year ended December 31, 1997 were $8,120,093, a
marginal decrease of $132,273, or 2%, compared to $8,252,366 for the year ended
December 31, 1996. This relatively even expense level for both years was due to
the combination of a significant decrease in expenses for two line items and a
corresponding increase in expenses in four other line items. Selling, general
and administrative expense decreased substantially to $4,234,040 for the year
ended December 31, 1997, compared to $4,851,648 for the year ended December 31,
1996. This decrease was due to the Company's significant efforts to control its
personnel and administrative costs. Advertising and programming decreased
dramatically during the year ended December 31, 1997, primarily due to the


                                      -18-
<PAGE>


discontinuation of the Gold Prospecting Show on The Nashville Network ("TNN").
The "Gold Prospecting Show" was produced for airing on TNN and was popular with
viewers. However, production and airing costs per show were approximately
$43,000. Due to the lack of immediate commercial success, the Company decided to
devote its resources to other aspects of the Company's business with the show
ending its run on TNN in May 1996. Advertising and programming was $219,839 for
the year ended December 31, 1997, a decrease of $725,518, compared to $945,357
for the year ended December 31, 1996. On the other hand, Satellite transmission
fees increased substantially to $2,120,369 for the year ended December 31, 1997,
compared to $1,441,619 for the year ended December 31, 1996, due to increases in
transponder and uplink costs for The Outdoor Channel. Cost of merchandise sold
increased significantly to $618,992 for the year ended December 31, 1997,
compared to $321,843 for the year ended December 31, 1996, due to the
substantial increase in Merchandise sales activity. Alaska trip expenses
increased to $655,834 for the year ended December 31, 1997, compared to $553,596
for the year ended December 31, 1996, due to the increased participation on the
Alaska trip. Interest expense increased substantially to $250,964 for the year
ended December 31, 1997, compared to $138,303 for the year ended December 31,
1996, due to the Company's significant increase in debt.

         INCOME BEFORE INCOME TAXES. Loss before income taxes decreased as a
percentage of revenues from 57% for the year ended December 31, 1996 to 28% for
the year ended December 31, 1997. This was due to increased revenues while
expenses, in the aggregate, remained near the same level for the year ended
December 31, 1997, compared to the year ended December 31, 1996.

         INCOME TAX EXPENSE. Income tax benefit for the year ended December 31,
1997 was $80,215 which was substantially less than $217,658 for the year ended
December 31, 1996, due to the Company having a significantly smaller loss for
1997 as compared to 1996.


COMPARISON OF YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995

         REVENUES. The Company's revenues include revenues from advertising
fees, GPAA and Lost Dutchman's membership sales, product sales and the Trips
Division sales. Advertising fees result from the sale of advertising time on The
Outdoor Channel and from advertising space in publications such as the Gold

Prospector magazine. Revenues for the year ended December 31, 1996 were
$5,258,008, an increase of $917,041 or 21%, compared to revenues of $4,340,967
for the year ended December 31, 1995. This increase was primarily the result of
increases in three items of revenue. Advertising revenue increased substantially
to $960,462 for the year ended December 31, 1996 compared to $439,817 for the
year ended December 31, 1995, due primarily to an increase in advertising
revenue at The Outdoor Channel. Merchandise sales were $488,973 for the year
ended December 31, 1996, compared to $0 for the year ended December 31, 1995,
due to the Company commencing operations of it s merchandise sales division.
Revenues from the Trips Division was up notably at $828,901 for the year ended
December 31, 1996 compared to $656,161 for the year ended December 31, 1995.
Membership sales were $2,910,447 for the year ended December 31, 1996, compared
to a like amount of $3,133,110 for the year ended December 31, 1995. Despite
management devoting significant time and resources to increasing distribution
and revenues for The Outdoor Channel, during 1996, the Company increased its
sales for the Alaska Trip, commenced a revenue producing merchandise division
and kept revenue nearly the same for Lost Dutchman's and other membership sales.

         EXPENSES. Expenses consist primarily of the cost of the Company's
satellite transponder and uplink facilities, programming, advertising and
promotion, sales and administrative salaries, office expenses and general
overhead. Expenses for the year ended December 31, 1996 were $8,252,366, a very
significant increase of $3,830,920, or 87%, compared to $4,421,446 for the year
ended December 31, 1995. This increase was predominately due to major increases
in three items and increases in several other items. Compensation and Related
Payroll Costs increased substantially to $1,700,088, an increase of $916,492 for
the year ended December 31, 1996, compared to $783,596 for the year ended
December 31, 1995. This increase was due to the cumulative addition of
executive, sales and administrative personnel for The Outdoor Channel during the
period after September 30, 1995. Advertising increased during the year ended


                                      -19-
<PAGE>


December 31, 1996, primarily due to increases in transponder and uplink costs
for The Outdoor Channel and promotion in conjunction with management's focus on
increasing visibility of The Outdoor Channel. Advertising was $945,357 for the
year ended December 31, 1996, an increase of $787,458, compared to $157,899 for
the year ended December 31, 1995. The Company's "Gold Prospecting Show" which
was produced for airing on The Nashville Network ("TNN") commencing January 1996
was popular with viewers. However, production and airing costs per show were
approximately $43,000. Due to the lack of immediate commercial success, the
Company decided to devote its resources to other aspects of the Company's
business with the show ending its run on TNN in May 1996, resulting in a
$574,700 loss to the Company for the year ended December 31, 1996, which is
included under advertising. There was no comparable loss in this category for
the year ended December 31, 1995. There were also significant increases in
Outside labor, Professional services, Shows and Seminars and Telephone and
utilities, which increases were in the range of approximately $60,000 to
$300,000 for each item. These increases were also primarily due to increased
activity at The Outdoor Channel. In addition, there was a new item of expense
not present in 1995 of Cost of merchandise sold which corresponds to the new
line item of revenue, Merchandise sales.

         INCOME BEFORE INCOME TAXES. Loss before income taxes increased as a
percentage of revenues from 2% for the year ended December 31, 1995 to 57% for
the year ended December 31, 1996. Although revenues increased for the year ended
December 31, 1996, compared to the year ended December 31, 1995, income before
income taxes was affected primarily by the very substantial increase in expenses
discussed above.

         INCOME TAX EXPENSE. Income tax benefit for the year ended December 31,
1996 was $217,658 which was substantially greater than $30,582 for the year
ended December 31, 1995, due to the Company having a significantly greater loss
for 1996 as compared to 1995.


LIQUIDITY AND CAPITAL RESOURCES

         The Company utilized cash from operations of $511,571 in 1997, compared
to utilizing cash from operations of $966,578 in 1996 and had a cash balance of
$373,368 at December 31, 1997, which was an increase of $291,341 from the
balance of $82,027 at December 31, 1996. Current assets increased to $1,001,696
compared to $784,494 in 1996. Current liabilities increased to $2,759,154 for
1997 compared to $1,495,785 for 1996. Net working capital decreased to
$(1,757,458) in 1997, compared to $(711,291) in 1996.

         In 1997, the Company did not generate sufficient cash flow from
operations to meet its cash flow requirements. In addition to cash generated
from operations, the Company's cash flow needs in 1997 were primarily met by
loans from principal shareholders, funds from its public offering and funds from
the private placement of The Outdoor Channel.

         From January 1 through August 14, 1997, Wilma M. Massie, a principal
shareholder of the Company, loaned the Company $324,000 on a note bearing
interest at 10% and Perry T. Massie, President of the Company, loaned the
Company $136,000 on a note bearing interest at 10%. In 1996, Wilma M. Massie
obtained an $80,000 letter of Credit that is being utilized by The Outdoor
Channel as a deposit for the PanAmSat Galaxy 10 satellite transponder. In
September 1997, Wilma M. Massie invested $40,000 in the Company's public
offering and Perry T. Massie invested $24,000 in the Company's public offering.

         The Company suspended its public offering in October 1997. The public
offering consisted of the sale of Units at a price of $8.00 per Unit, each made
up of two (2) shares of Common Stock and one (1) Class F Warrant to purchase
Common Stock. A total of 52,034 Units were sold for $416,272. Net proceeds to
the Company were approximately $314,000.

         In December 1997, the Company instituted a plan to make The Outdoor
Channel self supporting. Since that time the Company has not advanced
significant funds to the Channel with The Outdoor Channel supporting itself with
its revenues and outside investor funds. The Outdoor Channel raised $380,000
from private investors in December 1997. As of December 1997, The Outdoor
Channel owed the Company approximately $1,000,000.


                                      -20-
<PAGE>


         As of December 31, 1997, the Company had three notes in the aggregate
amount of $1,001,683 payable to a bank outstanding at interest rates ranging
from 9.75% to 13%. These notes are secured by substantially all of the Company's
assets and are personally guaranteed by Perry T. Massie, Thomas H. Massie and
Wilma M. Massie.

         As of December 31, 1997, the Company had four notes payable to
unaffiliated individuals, with balances outstanding as of that date of $59,923,
$85,817, $95,605 and $150,000. The first three notes bear interest rates that
range from 8% to 9.5% and are due in August 1999, April 2000 and December 2000,
respectively. The fourth note bears interest at 7.5% with principal payments of
$50,000 due every January commencing in 1997. The note for $59,923 was extended
on the same terms until August 1999. The note for $85,817 was renegotiated with
the Company agreeing to pay down part of the principal bringing the total amount
to owed to approximately $68,000 with monthly installments of $1,000 at 9%
interest with the principal balance due in May 2000. The note for $150,000 is
being renegotiated for short-term extensions.

         As of November 1998, the Company is generating sufficient cash flow
from operations to meet its short-term cash flow requirements. The Outdoor
Channel is also meeting its short-term cash flow requirements. Management
believes that the Company's existing cash resources and anticipated cash flow
from operations will be sufficient to fund the Company's operations at current
levels for the next twelve months. To the extent that such amounts are
insufficient to finance the Company's working capital requirements, the Company
could be required to seek financing. There can be no assurance that equity or
debt financing will be available if needed, or, if available, will be on terms
favorable to the Company or its shareholders. Significant dilution may be
incurred by present shareholders as a result of any such financing. The primary
source for short-term financing for The Outdoor Channel has been its recently
closed private placement. There can be no assurance that this source will
continue to be available, if needed, in the future. In the event, The Outdoor
Channel is required to seek financing, there can be no assurance that equity or
debt financing will be available if needed, or, if available, will be on terms
favorable to The Outdoor Channel or its shareholders. At the current level of
operations, the Company is retiring some existing debt and is planning only
minimal improvements to its properties. The Company anticipates that The Outdoor
Channel will commence retiring some of its debt with the Company in the first
half of 1999. The Company intends to utilize such funds to retire portions of
its bank loan and make Lost Dutchmans and GPAA acquisitions and improvements.
There can be no assurance that The Outdoor Channel will commence retiring its
debt with the Company in 1999.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive
Income, and SFAS No. 131, Disclosures about Segments of an Enterprise and
Related Information. SFAS No. 130 requires that an enterprise report, by major
components and as a single total, the change in its net assets during the period
from nonowner sources; and SFAS No. 131 establishes annual and interim reporting
standards for an enterprise's operating segments and related disclosures about
its products, services, geographic areas and major customers. Adoption of these
statements will not impact the Company's financial position, results of
operations or cash flows and any effect will be limited to the form and content
of its disclosures. Both statements are effective for fiscal years beginning
after December 15, 1997, with earlier application permitted.


                                      -21-
<PAGE>


OTHER MATTERS

         The Company believes that it has resolved the potential impact of the
year 2000 on the processing of data-sensitive information by the Company's
computerized information systems. The year 2000 problem is the result of
computer programs being written using two digits rather than four to defined the
applicable year. Any of the Company's programs that have time-sensitive software
that recognized a date using "00" as the year 1900 rather than the year 2000,
could result in miscalculations or system failures. Based on preliminary
information, costs of addressing potential problems are not currently expected
to have a material adverse impact on the Company's financial position, results
of operations or cash flows in future periods. However, if the Company, its
customers or vendors are unable to resolve such processing issues in a timely
manner, it could result in a material financial risk. Therefore, the Company
intends to devote the necessary resources to resolve any significant year 2000
issues in a timely manner.


ITEM.7   FINANCIAL STATEMENTS

         Following are consolidated financial statements of the registrant for
the years ended December 31, 1997 and 1996.


                                      -22-
<PAGE>



                              GLOBAL OUTDOORS, INC.
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

                                      WITH

                      INDEPENDENT AUDITORS' REPORT THEREON








                                      -23-
<PAGE>


                          INDEPENDENT AUDITORS' REPORT



Board of Directors of
Global Outdoors, Inc.


We have audited the accompanying consolidated balance sheet of Global Outdoors,
Inc. and subsidiaries (the "Company") as of December 31, 1997, and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the year then ended. 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 audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Global
Outdoors, Inc. and subsidiaries as of December 31, 1997, and the results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.





                                                     /s/ Corbin & Wertz
                                                     CORBIN & WERTZ

Irvine, California
April 14, 1998, except as to
  Note 9, which is as of July 14, 1998 and 
  Note 11, which is as of October 30, 1998


                                      -24-
<PAGE>


                               ARTHUR ANDERSEN LLP




                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------


To the Board of Directors of
          Global Outdoors, Inc.:

We have audited the accompanying consolidated balance sheet of GLOBAL OUTDOORS,
INC. (an Alaska corporation) AND SUBSIDIARIES as of December 31, 1996, and the
related consolidated statements of Operations, stockholders' equity and cash
flows for the year then ended, as restated, see Note 14. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Global Outdoors,
Inc. and subsidiaries as of December 31, 1996, and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.


                                                     /s/ Arthur Andersen LLP
                                                     ARTHUR ANDERSEN LLP
Orange County, California
April 15, 1997

                                      -25-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1997 AND 1996



                                                            1997         1996
                                                        -----------  -----------
ASSETS

Current assets:
   Cash                                                 $  373,368   $   82,027
   Current portion of stockholder receivable                34,200       56,400
   Advertising receivables, net of allowance for
    doubtful accounts of $48,958 and $39,242
    in 1997 and 1996, respectively                         159,069       82,334
   Income taxes receivable                                 310,215      230,000
   Inventories                                             105,735      159,361
   Prepaid expenses                                         19,109      174,372
                                                        -----------  -----------
         Total current assets                            1,001,696      784,494

Membership Recreational Mining Properties, net           1,020,239      995,010

Alaska Recreational Mining Properties, net               1,466,095    1,465,609

Outdoor Channel Equipment, net                             317,534      386,584

Other equipment and leasehold improvements, net            162,313      232,703

Stockholder receivable                                     160,586      223,657

Trademark, net of accumulated amortization of
 $6,579 and $4,720 in 1997 and 1996, respectively           95,770       85,601

Deposits and other assets                                   34,000       52,240
                                                        -----------  -----------

                                                        $4,258,233   $4,225,898
                                                        ===========  ===========


           See accompanying notes to consolidated financial statements

Continued
                                      -26-
<PAGE>

<TABLE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS - CONTINUED

                           DECEMBER 31, 1997 AND 1996
<CAPTION>


                                                           1997           1996
                                                       ------------   ------------

LIABILITIES AND STOCKHOLDERS' DEFICIT

<S>                                                    <C>            <C>
Current liabilities:
   Accounts payable and accrued expenses               $   934,581    $   420,198
   Line of credit                                                -        715,322
   Customer deposits                                        30,231          9,500
   Deferred compensation                                   200,000              -
   Current maturities of long-term debt                  1,051,682        303,593
   Current maturities of capital leases                     79,619         47,172
   Current maturities of stockholder loans                 463,041              -
                                                       ------------   ------------
         Total current liabilities                       2,759,154      1,495,785

Deferred revenue                                         2,215,114      2,084,782
Deferred rent                                              283,262              -
Long-term debt, less current portion                       361,234        637,717
Capital leases, less current portion                       141,458        192,664
Stockholder loans, less current portion                     47,337              -
                                                       ------------   ------------
         Total liabilities                               5,807,559      4,410,948
                                                       ------------   ------------

Stockholders' deficit:
   Convertible preferred stock, nonvoting, 10%
     noncumulative, no liquidation preference, $.001
     par value; 10,000,000 shares authorized; 60,675
     shares (1997) and 60,775 shares (1996) issued
     and outstanding                                            61             61
   Common stock, $.02 par value; 50,000,000 shares
     authorized; 4,394,492 shares (1997) and 4,122,394
     shares (1996) issued and outstanding                   87,890         82,448
   Common stock subscribed, 104,069 shares subscribed        2,081              -
   Common stock subscriptions receivable                  (221,250)      (221,250)
   Additional paid-in capital                            3,936,381      2,941,163
   Treasury stock                                         (625,000)             -
   Preferred stock dividend payable in common stock              -         12,640
   Retained deficit                                     (4,729,489)    (3,000,112)
                                                       ------------   ------------
         Total stockholders' deficit                    (1,549,326)      (185,050)
                                                       ------------   ------------

                                                       $ 4,258,233    $ 4,225,898
                                                       ============   ============
</TABLE>

           See accompanying notes to consolidated financial statements


                                      -27-
<PAGE>

<TABLE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<CAPTION>


                                                                   1997           1996
                                                               ------------   ------------

<S>                                                            <C>            <C>
Revenues:
   Alaska trip                                                 $ 1,027,354    $   828,901
   Merchandise sales                                               767,308        488,973
   Membership sales                                              2,569,018      2,910,447
   Advertising                                                   1,563,985        960,462
   Interest                                                         18,092         23,789
   Other income                                                          -         45,436
   Gain on sale of subsidiary stock                                363,660              -
                                                               ------------   ------------

         Total revenues                                          6,309,417      5,258,008

Expenses:
   Alaska trip expenses                                            655,834        553,596
   Cost of merchandise sold                                        618,992        321,843
   Satellite transmission fees                                   2,120,369      1,441,619
   Advertising and programming                                     219,839        945,357
   Selling, general and administrative                           4,234,040      4,851,648
   Interest                                                        250,964        138,303
   Loss on disposal of equipment                                    20,055              -
                                                               ------------   ------------

         Total expenses                                          8,120,093      8,252,366
                                                               ------------   ------------

Loss before minority interest in net losses of consolidated
 subsidiaries and income taxes                                  (1,810,676)    (2,994,358)

Minority interest in net losses of consolidated subsidiaries        16,340              -
                                                               ------------   ------------

Loss before income taxes                                        (1,794,336)    (2,994,358)

Income tax benefit                                                  80,215        217,658
                                                               ------------   ------------

Net loss                                                       $(1,714,121)   $(2,776,700)
                                                               ============   ============

Loss per share                                                 $     (0.39)   $     (0.68)
                                                               ============   ============

Weighted average number of common shares
 outstanding                                                     4,356,371      4,103,141
                                                               ============   ============
</TABLE>


           See accompanying notes to consolidated financial statements


                                      -28-
<PAGE>

<TABLE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<CAPTION>

                                                                                                                                    
                                                                                                                                    
                                      PREFERRED STOCK                   COMMON STOCK                 COMMON STOCK SUBSCRIBED        
                               ------------------------------   ------------------------------    ------------------------------
                                  SHARES          AMOUNT           SHARES           AMOUNT           SHARES           AMOUNT        
                               -------------   --------------   -------------    -------------    -------------    -------------    

                                                                                                                                   
<S>                                  <C>       <C>                 <C>           <C>                         <C>   <C>           
Balances, January 1, 1996            63,195    $          63       4,074,988     $     81,500                -     $          -     

Preferred stock converted                                                                                                           
 to common stock                     (2,420)              (2)          2,420               48                -                -     

Common stock issued for                                                                                                             
 services                                 -                -          21,568              431                -                -     

Common stock issued for                                                                                                             
 private placement                        -                -          26,868              538                -                -     

Purchase of partial shares                -                -               -                -                -                -     

Preferred stock dividend                                                                                                            
 payable in common stock                  -                -               -                -                -                -     

Retirement of treasury stock              -                -          (3,450)             (69)               -                -     

Net loss                                  -                -               -                -                -                -     
                               -------------   --------------   -------------    -------------    -------------    -------------    

Balances, December 31, 1996          60,775               61       4,122,394           82,448                -                -     


</TABLE>

Continued

                                      -29-
<PAGE>


<TABLE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<CAPTION>

                                  COMMON                                      PREFERRED                                        
                                  STOCK        ADDITIONAL                       STOCK                                         
                               SUBSCRIPTION     PAID-IN        TREASURY        DIVIDEND     ACCUMULATED                 
                                RECEIVABLE      CAPITAL         STOCK          PAYABLE        DEFICIT        TOTAL    
                               ------------   ------------   ------------   ------------   ------------   ------------
                                                                                                             
<S>                            <C>            <C>            <C>            <C>            <C>            <C>                
Balances, January 1, 1996      $  (221,250)   $ 2,793,938    $         -    $         -    $  (210,772)   $ 2,443,479

Preferred stock converted
 to common stock                         -            (46)             -              -              -              -   

Common stock issued for
 services                                -         90,400              -              -              -         90,831

Common stock issued for
 private placement                       -         75,526              -              -              -         76,064

Purchase of partial shares               -             (9)             -              -              -             (9)

Preferred stock dividend
 payable in common stock                 -              -              -         12,640        (12,640)             -

Retirement of treasury stock             -        (18,646)             -              -              -        (18,715)

Net loss                                 -              -              -              -     (2,776,700)    (2,776,700)
                               ------------   ------------   ------------   ------------   ------------   ------------

Balances, December 31, 1996       (221,250)     2,941,163              -         12,640     (3,000,112)      (185,050)

</TABLE>
                                                                          

Continued
                                      -30-
<PAGE>


<TABLE>
                                                                                                                    
                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES
                                                                                                                 
      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - CONTINUED
                                                                                                                 
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                             
<CAPTION>
                                                                                                                                    
                                      PREFERRED STOCK                   COMMON STOCK                 COMMON STOCK SUBSCRIBED        
                               ------------------------------   ------------------------------    ------------------------------    
                                  SHARES          AMOUNT           SHARES           AMOUNT           SHARES           AMOUNT        
                               -------------   --------------   -------------    -------------    -------------    -------------    
                                                                                                                                    
<S>                                  <C>       <C>                 <C>           <C>                   <C>         <C>
Preferred stock converted                                                                                                           
 to common                             (100)               -             100                2                -                -     
                                                                                                                                    
Common stock issued as                                                                                                              
 dividend on preferred stock              -                -          12,398              248                -                -     
                                                                                                                                    
Common stock issued as                                                                                                              
 pledged collateral                       -                -         250,000            5,000                -                -     
                                                                                                                                    
Common stock issued for                                                                                                             
 services rendered                        -                -           9,600              192                -                -     
                                                                                                                                    
Issuance of common stock                                                                                                           
 for offering                             -                -               -                -          104,069            2,081     
                                                                                                                                    
Net loss                                  -                -               -                -                -                -     
                               -------------   --------------   -------------    -------------    -------------    -------------    
                                                                                                                                    
Balance, December 31, 1997           60,675    $          61       4,394,492     $     87,890          104,069     $      2,081     
                               =============   ==============   =============    =============    =============    =============    

</TABLE>

Continued



                                      -31-
<PAGE>

<TABLE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                             
<CAPTION>


                                 COMMON                                       PREFERRED                                        
                                  STOCK        ADDITIONAL                       STOCK                                         
                               SUBSCRIPTION     PAID-IN        TREASURY        DIVIDEND     ACCUMULATED                 
                                RECEIVABLE      CAPITAL         STOCK          PAYABLE        DEFICIT         TOTAL    
                               ------------   ------------   ------------   ------------   ------------   ------------

<S>                            <C>            <C>            <C>            <C>            <C>            <C>  
Preferred stock converted                -             (2)             -              -              -              -   
 to common                                                                                                              
                                                                                                                        
Common stock issued as                   -         27,648              -        (12,640)       (15,256)             -   
 dividend on preferred stock                                                                                            
                                                                                                                        
Common stock issued as                   -        620,000       (625,000)             -              -              -   
 pledged collateral                                                                                                     
                                                                                                                       
Common stock issued for                  -         35,608              -              -              -         35,800   
 services rendered                                                                                                        
                                                                                                                           
Issuance of common stock                 -        311,964              -              -              -        314,045   
 for offering                                                                                                          
Net loss                                 -              -              -              -     (1,714,121)    (1,714,121)       
                               ------------   ------------   ------------   ------------   ------------   -----------
                               $  (221,250)   $ 3,936,381    $  (625,000)   $         -    $(4,729,489)   $(1,549,326)           
Balance, December 31, 1997     ============   ============   ============   ============   ============   ============  

</TABLE>

           See accompanying notes to consolidated financial statements



                                      -32-
<PAGE>

<TABLE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<CAPTION>


                                                               1997           1996
                                                          ------------   ------------
<S>                                                       <C>            <C>
Cash flows from operating activities:
   Net loss                                               $(1,714,121)   $(2,776,700)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
       Depreciation and amortization                          222,537        263,144
       Provision for doubtful accounts                          9,716         24,138
       Common stock issued for services                        35,800         90,831
       Application for rent obligation toward reduction
        of stockholder note receivable                         85,271         67,617
       Deferred income taxes                                  (81,015)             -
       Gain on sale of subsidiary stock                      (363,660)             -
       Minority interest in net losses of consolidated
         subsidiary                                           (16,340)             -
       Loss on disposal of equipment                           20,055              -
       Changes in operating assets and liabilities:
           Inventories                                         53,626         32,907
           Prepaid expenses                                   155,263        385,687
           Income taxes receivable                                800       (154,719)
           Advertising receivables                            (86,451)        29,465
           Deposits and other assets                           18,240        289,961
           Accounts payable and accrued expenses              514,383        260,396
           Deferred revenue                                   130,332        528,174
           Deferred rent                                      283,262              -
           Deferred compensation                              200,000              -
           Customer deposits                                   20,731         (7,479)
                                                          ------------   ------------

    Net cash used in operating activities                    (511,571)      (966,578)
                                                          ------------   ------------

Cash flows from investing activities:
    Purchases of property, plant and equipment                (92,611)      (919,311)
    Expenditures for trademarks                               (12,025)       (44,353)
                                                          ------------   ------------

    Net cash used in investing activities                    (104,636)      (963,664)
                                                          ------------   ------------
</TABLE>

Continued


                                      -33-
<PAGE>

<TABLE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<CAPTION>


                                                          1997           1996
                                                      ------------   ------------
<S>                                                   <C>            <C>
Cash flows from financing activities:
    Net proceeds from offering                            314,045              -
    Proceeds from private placement                            --         76,064
    (Payments) proceeds from long-term debt, net         (256,014)     1,496,481
    Net proceeds from stockholder's loans                 522,676              -
    Principal payments on capital leases                  (53,159)             -
    Retirement of treasury stock                               --        (18,715)
    Purchase of partial shares                                 --             (9)
    Sale of subsidiary stock to minority interests        380,000              -
                                                      ------------   ------------

    Net cash provided by financing activities             907,548      1,553,821
                                                      ------------   ------------

Net change in cash                                        291,341       (376,421)

Cash at beginning of year                                  82,027        458,448
                                                      ------------   ------------
Cash at end of year                                   $   373,368    $    82,027
                                                      ============   ============
Supplemental disclosures of cash flow information:
    Cash paid during the year for:
       Income taxes                                   $         -    $         -
                                                      ============   ============
       Interest                                       $   209,686    $   132,677
                                                      ============   ============
Supplemental disclosures of noncash investing and
 financing activities:
    Land acquired by incurring note payable           $         -    $   200,000
                                                      ============   ============
    Application of rent obligation toward reduction
     of stockholder note receivable                   $    85,271    $    73,150
                                                      ============   ============
</TABLE>


During 1997, the Company acquired equipment under capital lease obligations
totaling $34,400.


           See accompanying notes to consolidated financial statements


                                      -34-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996




NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES
-----------------------------------------------------------------------

Organization
------------

Global Outdoors, Inc. (the "Company") owns a majority interest in The Outdoor
Channel, Inc., a national television network devoted solely to traditional
outdoor activities, such as hunting, fishing, shooting sports, rodeo and
recreational gold prospecting. The Company's other business activities consist
of the promotion and sale of an "Alaska trip", a recreational gold mining
expedition to the Company's Cripple River property located near Nome, Alaska,
and the sale of Lost Dutchman's (LDMA-AU, Inc.) memberships which entitle
members to engage in recreational prospecting on its California, Oregon, Alaska,
Nevada, Arizona, Colorado, Georgia, North Carolina and South Carolina
properties. The Company has also signed a mutual use agreement with another
organization whose members are entitled to engage in recreational mining on
certain of each other's properties. The Company also receives revenues from the
sale of memberships in a gold prospecting club, Gold Prospectors' Association of
America, Inc. ("GPAA"), revenue from advertisers in a bi-monthly magazine,
advertising revenues through cable television programming dba The Outdoor
Channel, Inc. and through merchandise sales. Effective July 23, 1996, the
Company changed its name from Global Resources, Inc. to Global Outdoors, Inc.

On February 10, 1995, the Company acquired 100% of the stock of GPAA in exchange
for 2,500,000 shares of its Common Stock (the "Acquisition"). The acquisition
agreement provided for the issuance of up to an additional 1,500,000 shares of
Common Stock ("Earn Out Shares") to the former stockholders of GPAA if GPAA
achieved certain earnings or valuation milestones. The former stockholders of
GPAA, Perry T. Massie, Thomas H. Massie, and Wilma M. Massie, are stockholders
of the Company and Messrs. Perry and Thomas Massie are officers of the Company.
For purposes of the Acquisition, the value of the Global Common Stock was deemed
to be $3.50 per share with the initial total acquisition cost being $8,750,000.
For accounting purposes, the assets of GPAA are recorded at their historical
cost basis in a manner similar to a pooling of interest. To this date, no earn
out shares have been issued.

Basis of Presentation
---------------------

During 1997, the Company experienced significant operating losses, principally
due to The Outdoor Channel, Inc. As a result of losses in 1997 and prior years,
at December 31, 1997, the Company has negative working capital and a deficit
stockholders' equity. In November 1997, the Company commenced a plan to make The
Outdoor Channel, Inc. self supporting. In furtherance of that plan, The Outdoor
Channel, Inc. has been conducting a private placement of common stock and has
raised $1,005,000 through May 31, 1998. The Outdoor Channel, Inc. cannot predict
how much additional


                                      -35-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

money it will raise in its private placement. The Outdoor Channel, Inc. is also
currently negotiating carriage agreements with third parties that could result
in a significant increase in the subscriber base for The Outdoor Channel, Inc.,
which could result in an increase in advertising revenue for the Company.

Management is unable to predict the outcome of those negotiations or determine
when and if the Company's revenues will increase therefrom.

Management is also unable to predict whether its current capital raising efforts
will be sufficient to cover operating losses until the Company achieves
profitability. In April 1998, the Company entered into agreements with Perry T.
Massie and Wilma M. Massie, (the "Principal Stockholders"), whereby the
Principal Stockholders agreed to provide for the cash flow requirements of the
Company over the next twelve months by means of loans or equity investments, if
needed. The Company's financial condition and future results of operations could
be adversely effected should the Company continue to generate operating losses
and not be able to raise sufficient additional equity funds through private
placements or through the stockholder commitment, as noted above.

Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of Global Outdoors,
Inc., LDMA-AU, Inc., GPAA and The Outdoor Channel, Inc. All material
intercompany accounts and transactions have been eliminated in consolidation.
During 1997, 380,000 shares of The Outdoor Channel, Inc.'s common stock were
issued to outside parties for $380,000, decreasing the Company's ownership
interest in The Outdoor Channel to 95.7%. See Note 11 regarding subsequent
event.

Use of Estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements.
Certain estimates made by management also effect the reported operating results
during the reported periods. Actual results could materially differ from those
estimates. Significant estimates made by management include the provision for
losses on accounts receivable, stockholder receivable, the net realizability of
inventories, the evaluation of the potential impairment of property and
equipment, trademark and the net realizability of deferred tax assets.


                                      -36-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

Fair Value of Financial Instruments
-----------------------------------

The Company has financial instruments whereby the fair market value of the
financial instruments could be different than that recorded on a historical
basis. The Company's financial instruments consist of its cash and cash
equivalents, stockholder receivable, advertising receivables, long-term debt,
related party debt and accounts payable. The carrying amounts of the Company's
financial instruments generally approximate their fair values at December 31,
1997. The fair market value of financial instruments classified as current
assets or liabilities approximate carrying value due to the short-term maturity
of the instruments. The fair value of the Company's related party receivable and
debt is not practicable to obtain as market comparables are not available for
such instruments.

Risks and Uncertainties
-----------------------

The Company's operations are subject to various government regulations. The
operations of cable television systems, satellite distribution systems and
broadcast television program distribution companies are subject to the
Communications Act of 1934, as amended, and to regulatory supervision thereunder
by the Federal Communications Commission (the "FCC"). The Company's leased
uplink facility in Perris, California is licensed by the FCC and must be
operated in conformance with the terms and conditions of that license. Cable
systems are also subjected to local franchise authority regulation.

Concentration of Credit Risk
----------------------------

The Company maintains, at times, cash balances at certain financial institutions
in excess of amounts insured by federal agencies.

Inventories
-----------

Inventories are valued at the lower of cost (first-in, first-out) or market.

Trademarks
----------

The trademark is amortized on a straight-line basis over 15 years.


                                      -37-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

Membership Recreational Mining Properties
-----------------------------------------

Membership recreational mining properties consist primarily of land, are held
for membership use and are recorded at cost, net of accumulated depreciation on
non-land assets provided on a straight-line basis over 15 years.

Alaska Recreational Mining Properties
-------------------------------------

Alaska recreational mining properties consist primarily of land, buildings and
equipment and are recorded at cost, net of accumulated depreciation on the
buildings and equipment provided on a straight-line basis over 10 years.

Outdoor Channel Equipment
-------------------------

Outdoor Channel assets consist primarily of equipment and are recorded at cost,
net of accumulated depreciation provided on a straight-line basis over five
years.

Other Equipment and Leasehold Improvements
------------------------------------------

Equipment and leasehold improvements are carried at cost, net of accumulated
depreciation provided on a straight-line basis over five to ten years.

Impairment of Long-Lived Assets
-------------------------------

In 1995, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121 ("SFAS 121") "ACCOUNTING FOR THE IMPAIRMENT OF
LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF". The Company
adopted SFAS 121 in 1996, as required. SFAS 121 establishes accounting standards
for the impairment of long-lived assets, certain identifiable intangibles, and
goodwill related to those assets to be held and used and for long-lived assets
and certain identifiable intangibles to be disposed of. The Company evaluates
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Management of the Company
assesses the recoverability of long-lived assets by determining whether the
depreciation and amortization of such assets over their remaining lives can be
recovered through projected undiscounted cash flows. The amount of impairment,
if any, is measured based on fair value (projected discounted cash flows) and is
charged to operations in the 


                                      -38-
<PAGE>

                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

period in which such impairment is determined by management. To date, management
has not identified any impairment of long-lived assets.

Revenue Recognition
-------------------

Revenues on the "Alaska trip" income is recognized when trips are taken. Trips
are taken in June through August each year.

The Company has sold memberships in LDMA-AU primarily on an installment basis.
Memberships include contracts that give purchasers recreational prospecting and
mineral rights to the Company's land and rights to use the land and facilities
for camping and recreational vehicle parking. The contracts are generally
noninterest bearing, unsecured and provide for a down payment and monthly
installments of $25 for periods of up to ten years. No deferred revenue or
accounts receivable have been recorded for amounts not yet due under the
contract terms due to the uncertainty of collection. Sales revenue is recognized
based upon a weighted average ten year straight-line method. The ten year
weighted average method was established based upon historical membership
longevity, taking into consideration member defaults and withdrawals. Deposits
are taken on new sales contracts, and are fully refundable for 10 days.

The Company also sells GPAA memberships for periods varying from one year to
lifetime memberships. For nonlifetime memberships, revenue is recognized over
the life of the membership. Approximately 10% of GPAA members are members of
LDMA-AU referred to in the paragraph above. Management estimates the expected
period of time a lifetime member is active in the GPAA to be fifteen years.
Accordingly, for lifetime memberships, revenue is recognized on a straight-line
basis over fifteen years.

Advertising revenue for The Outdoor Channel, Inc. is recognized when the
advertisement takes place. Advertising revenue from advertisers in the Company's
bi-monthly magazine is recognized when the magazine is distributed.

Stock-Based Compensation
------------------------

During 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "ACCOUNTING FOR STOCK-BASED
COMPENSATION," which defines a fair value based method of accounting for
stock-based compensation. However, SFAS 123 allows an entity to continue to
measure compensation cost related to stock and stock options issued to 


                                      -39-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

employees using the intrinsic method of accounting prescribed by Accounting
Principles Board Opinion No. 25 ("APB 25"), "ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES." Entities electing to remain with the accounting method of APB 25
must make pro forma disclosures of net income and earnings per share, as if the
fair value method of accounting defined in SFAS 123 had been applied. In 1996,
the Company adopted the provisions of SFAS 123 which relate to non-employee
based compensation and, has elected to account for its stock-based compensation
to employees under APB 25.

Loss Per Common Share
---------------------

In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards (SFAS) No. 128, EARNINGS PER SHARE
("EPS"). SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on
the face of all income statements issued after December 15, 1997 for all
entities with complex capital structures. Basic EPS is computed as net income
divided by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur from common
shares issuable through stock options, warrants and other convertible
securities. There was no effect on EPS upon the adoption of the provisions of
SFAS No. 128 for all years presented. Loss per common share has been computed on
the weighted average number of common and equivalent shares outstanding. Basic
and diluted net loss per share are approximately the same.

Advertising
-----------

The Company generally expenses advertising costs as incurred. Advertising
expense for the years ended December 31, 1997 and 1996 was $219,839 and
$945,357, respectively.

Income Taxes
------------

The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109 ("Statement 109"), "ACCOUNTING FOR INCOME
TAXES." Under Statement 109, an asset and liability method is used whereby
deferred tax assets and liabilities are determined based on temporary
differences between bases used for financial reporting and income tax reporting
purposes. Income taxes are provided based on the enacted tax rates in effect at
the time such temporary differences are expected to reverse. A valuation
allowance is provided for certain deferred tax assets if it is more likely than
not that the Company will not realize tax assets through future operations. The
Company and its subsidiaries file a consolidated federal income tax return.


                                      -40-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

Limitation on Dividends
-----------------------

Pursuant to state laws, the Company is currently restricted, and may be
restricted for the foreseeable future, from making dividends to its stockholders
as a result of its accumulated deficit as of December 31, 1997.

New Accounting Pronouncements
-----------------------------

In June 1997, the FASB issued SFAS No. 130, REPORTING COMPREHENSIVE INCOME, and
SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION. SFAS No. 130 requires that an enterprise report, by major
components and as a single total, the change in its net assets during the period
from nonowner sources; and SFAS No. 131 establishes annual and interim reporting
standards for an enterprise's operating segments and related disclosures about
its products, services, geographic areas and major customers. Adoption of these
statements will not impact the Company's financial position, results of
operations or cash flows and any effect will be limited to the form and content
of its disclosures. Both statements are effective for fiscal years beginning
after December 15, 1997, with earlier application permitted.

Government Regulation
---------------------

The Company's operations are subject to various government regulations. The
operations of cable television systems, satellite distribution systems and
broadcast television program distribution companies are subject to the
Communications Act of 1934, as amended, and to regulatory supervision thereunder
by the Federal Communications Commission (the "FCC"). The Company's leased
uplink facility in Perris, California is licensed by the FCC and must be
operated in conformance with the terms and conditions of that license. Cable
systems are also subjected to local franchise authority regulation.

Local Cable Regulation
----------------------

The cable television industry is regulated by municipalities or other local
government authorities which have the jurisdiction to grant and to assign
franchises and to negotiate generally the terms and conditions of such
franchises, including rates charged to subscribers, except to the extent that
such jurisdiction is preempted by federal law. Any such rate regulation could
place downward pressure on the potential subscriber fees to be earned by the
Company.


                                      -41-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES. continued
-----------------------------------------------------------------------

Federal Cable Regulation
------------------------

In 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which provides, among other
things, for a "must carry" regime for local broadcast stations (which requires
the mandatory carriage of certain broadcast stations and payments by cable
operators to other broadcast stations for retransmission of their signals in
some instances), for channel positioning rights for certain local broadcast
stations, for limits on the size of multiple system operators, for limits or
carriage by cable systems and other video distributors of affiliated program
services, for a prohibition on programmers in which cable operators have an
"attributable interest" from discriminating between cable operators and their
competitors, or among cable operators, and for increased competition in video
programming distribution (both within the cable industry and between cable and
competing video distributors). In addition, the 1992 Cable Act requires the FCC
to establish national guidelines for the rates that cable operators subject to
rate regulation may charge for basic cable services and certain other services
and to establish guidelines for determining when cable programming may not be
provided exclusively to cable system operators. Various cable operators have
initiated litigation challenging certain aspects of the 1992 Cable Act. The
constitutionality of the basic scheme of rate regulation under the 1992 Cable
Act has been upheld by a federal district court, and the FCC's regulation rule
were upheld by a federal appeals court in June 1995. The outcome of the balance
of this litigation cannot be predicted. However, Congress passed and the
President signed in March 1996 the most comprehensive rewrite or
telecommunications law since the Commissions Act of 1934, reversing or modifying
many of the provisions of the 1992 Act. Among other things, the new legislation
allows cable and telephone industries into each other's markets and eliminates
federal cable rate regulation, immediately for small systems and within three
years for large operators.

Other Regulations
-----------------

In addition to the regulations applicable to the cable television industry, in
general, the Company is also subject to various local, state and federal
regulations, including, without limitations, regulations promulgated by federal
and state environmental, health and labor agencies.


                                      -42-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
--------------------------------------

The components of property, plant and equipment at December 31 are as follows:

                                                          1997           1996
                                                     ------------   ------------
Membership recreational mining properties:
    Land                                             $   926,378    $   926,378
    Buildings and improvements                           137,908        102,874
                                                     ------------   ------------
                                                       1,064,286      1,029,252
    Less accumulated depreciation and amortization       (44,047)       (34,242)
                                                     ------------   ------------

                                                     $ 1,020,239    $   995,010
                                                     ============   ============

Alaska recreational mining properties:
    Land                                             $ 1,129,773    $ 1,129,773
    Buildings and improvements                           461,481        444,549
    Vehicles and equipment                               950,591        894,103
                                                     ------------   ------------
                                                       2,541,845      2,468,425
    Less accumulated depreciation and amortization    (1,075,750)    (1,002,816)
                                                     ------------   ------------

                                                     $ 1,466,095    $ 1,465,609
                                                     ============   ============

Outdoor Channel equipment:
    Equipment                                        $   448,218    $   433,211
    Furniture and fixtures                                67,551         64,001
    Leasehold improvements                                25,626         25,626
                                                     ------------   ------------
                                                         541,395        522,838
    Less accumulated depreciation and amortization      (223,861)      (136,254)
                                                     ------------   ------------

                                                     $   317,534    $   386,584
                                                     ============   ============


                                      -43-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996



NOTE 2 - PROPERTY, PLANT AND EQUIPMENT, continued
-------------------------------------------------


                                                        1997          1996
                                                     ----------   ----------

Other equipment and leasehold improvements:
    Furniture and fixtures                           $  11,625    $  11,625
    Equipment                                          205,353      287,842
    Vehicles                                           150,283      150,283
    Leasehold improvements                               6,578        6,578
                                                     ----------   ----------
                                                       373,839      456,328
    Less accumulated depreciation and amortization    (211,526)    (223,625)
                                                     ----------   ----------

                                                     $ 162,313    $ 232,703
                                                     ==========   ==========

NOTE 3 - DEFERRED REVENUE
-------------------------

As of December 31, 1997, scheduled payments and amounts to be recognized as
income assuming collectibility in future years from existing LDMA-AU and GPAA
sales contracts are:

                                                    Revenue To Be
                            Scheduled Payments        Recognized
                            ------------------   ------------------

 1998                        $   1,929,296       $   1,507,653
 1999                            1,615,385           1,447,728
 2000                            1,530,475           1,416,094
 2001                            1,298,824           1,368,124
 2002                            1,040,671           1,298,410
 Thereafter                        580,461           3,172,217
                             --------------      --------------

                             $   7,995,112       $  10,210,226
                             ==============      ==============


                                      -44-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

NOTE 4 - DEBT
-------------

Long-term debt at December 31 consists of the following:

                                                             1997        1996
                                                          ----------  ----------

Notes payable to individuals, secured by deed of 
 trust, payable in monthly installments of $805 
 including interest at 8.5%, balance due December
 2000                                                     $  95,605   $  97,237

Note payable to an individual, secured by first deed
 of trust on land, payable in monthly installments of
 $746 including interest at 9.5%, balance due August
 1999                                                        59,923      63,020

Note payable to an individual, secured by first deed
 of trust on land, payable in monthly installments of
 $900 including interest at 8%, balance due April 2000       85,817      89,917

Note payable to individuals, secured by first deed of 
 trust on land, payable in four annual installations of
 $50,000 beginning in 1997, with interest at 7.5%           150,000     200,000

Note payable to the major stockholder, secured by a
 motor home, payable at $520 per month including
 interest at 9%                                              50,378      51,070

Note payable to two major stockholders, due on
 demand, maturing April 1999, with interest at 10%          460,000           -

Note payable to finance companies, secured by
 vehicles, payable in monthly installments including
 interest ranging from 7.75% to 9.75%                        19,888      27,566


                                      -45-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
                                                           1997           1996
                                                       ------------   ------------
<S>                                                    <C>            <C>
Installment note payable to a bank, secured by
 substantially all of the Company's assets, guaranteed
 by three major stockholders, payable in monthly
 installments of $12,500 plus interest at 9.75%            262,500        412,500

Installment note payable to a bank, secured by
 substantially all of the Company's assets, guaranteed
 by three major stockholders, payable in monthly
 installments of $4,149 plus interest at index plus
 4.5% (13% at December 31, 1997)                            91,183             -

Note payable to a bank, secured by substantially all
 of the Company's assets, guaranteed by three major
 stockholders, with interest due monthly at a rate of
 prime plus 3.125% (11.625% at December 31, 1997),
 due July 10, 1998. The Company is negotiating with
 the bank to extend this maturity date                     648,000              -
                                                       ------------   ------------
                                                         1,923,294        941,310

Less current maturities                                 (1,514,723)      (303,593)

                                                       ------------   ------------
                                                       $   408,571    $   637,717
                                                       ============   ============
</TABLE>

The aggregate maturities of long-term debt as of December 31, 1997 are as
follows:

                   Years Ending
                   December 31,

                      1998                        $      1,514,723
                      1999                                 213,633
                      2000                                  60,568
                      2001                                   6,923
                      2002                                   5,260
                      Thereafter                           122,187
                                                   ---------------

                                                   $     1,923,294
                                                   ================


                                      -46-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 5 - CAPITAL LEASES
-----------------------

The Company leases various equipment which are accounted for as capital leases.
A schedule of future minimum lease payments together with the present value of
minimum lease payments as of December 31, 1997 is as follows:

                                1998                      $       106,820
                                1999                               87,881
                                2000                               42,785
                                2001                               19,765
                                                          ----------------
                                                                  257,251
              Less amount representing interest
                ranging from 7% to 21.69%                         (36,174)
                                                          ----------------

              Present value of minimum lease payments             221,077

              Less current portion                                (79,619)
                                                          ----------------
                                                          $       141,458
                                                          ================

At December 31, 1997 the book value of the assets held under capital leases is
approximately $180,000. The amortization of these assets is included in
depreciation expense.

NOTE 6 - STOCKHOLDERS' EQUITY
-----------------------------

Preferred Stock
---------------

During 1990, the Company issued 71,835 shares of 10% noncumulative, convertible,
exchangeable, nonvoting preferred stock at $.001 par value for $5 per share. The
preferred shares have no liquidation preference over the Company's common stock.
The preferred shares are convertible at any time at the option of the holder
into common stock at the rate of one share of common stock for one share of
preferred stock. The preferred stock is exchangeable at the option of the Board
of Directors, in whole or in part, at the same rate of one share of common stock
for one share of preferred stock. On December 11, 1996, the Company authorized
the payment of a common stock dividend to holders of the preferred shares as of
December 31, 1996 at a rate of one common stock for every ten shares of
preferred stock. The remaining stock dividend was paid in December 1997 and is
reflected as a common stock dividend payable on December 31, 1996.


                                      -47-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 6 - STOCKHOLDERS' EQUITY, continued
----------------------------------------

Stock Option Plan
-----------------

The Company has three stock option plans, Stock Option Plan 1 (Plan 1), Stock
Option Plan 2 (Plan 2), and the 1995 Stock Option Plan ("1995 Plan"). As
discussed in Note 1 above, the Company accounts for the above plans under APB
Opinion No. 25, under which no compensation cost has been recognized.

SFAS 123 PRO FORMA INFORMATION 
------------------------------

Pro forma information regarding net loss and loss per share is required by SFAS
123, and has been determined as if the Company had accounted for its employee
stock options under the fair value method of SFAS 123. The fair value for these
options was estimated at the date of grant using the Black Scholes option
pricing model with the following assumptions; risk free interest rate of 6.3%;
dividend yield of 0%; expected life of the options of 1 to 5 years; and
volatility factors of the expected market price of the Company's common stock of
59% and 67% for 1997 and 1996, respectively.

The Black Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

Had compensation cost for the plans been determined consistent with SFAS No.
123, the Company's net income and loss per share would have been the following
pro forma amounts for the years ended December 31, 1997 and 1996:


                                      -48-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 6 - STOCKHOLDERS' EQUITY, continued
----------------------------------------

                                                    1997              1996
                                                    ----              ----

     Net loss:                              
          As reported                         $    (1,714,121)    $  (2,776,700)
                                              ================    ==============
          Pro forma                           $    (1,776,440)    $  (2,796,532)
                                              ================    ==============
                   
     Loss per share:                        
          As reported                         $         (0.39)    $       (0.68)
                                              ================    ==============
          Pro forma                           $         (0.41)    $       (0.68)
                                              ================    ==============

A summary of the status of the Company's three stock option plans at December
31, 1997 and 1996 and changes during the years then ended is presented in the
table and narrative below:

                                                      SHARES         PRICE
                                                  ------------   ------------

Outstanding at January 1, 1996                        510,000    $ 2.25-3.50
   Granted                                             13,000      3.25-4.00
   Exercised                                               --              -
   Expired/forfeited                                  (20,000)          3.25
                                                  ------------

Outstanding at December 31, 1996                      503,000      2.25-4.00
   Granted                                                  -
   Exercised                                                -
   Expired/forfeited                                 (125,000)          3.50

Outstanding at December 31, 1997                      378,000      2.25-4.00
                                                  ============

Exercisable at December 31, 1997                      378,000
                                                  ============

Weighted average fair value of options granted    $      2.42
                                                  ============

The 378,000 options outstanding at December 31, 1997 have a weighted average
remaining contractual life of 5.22 years.

On November 17, 1994, the principal stockholder granted options to purchase
200,000 shares each to three directors of the Company. In July 1995, two of
these directors subsequently assigned 40,000


                                      -49-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 6 - STOCKHOLDERS' EQUITY, continued
----------------------------------------

shares each to an employee of the Company. The options all vest immediately,
have exercise prices of $2.33 and expire November 17, 2004.

Common Stock Subscriptions Receivable
-------------------------------------

On June 22, 1993 certain stockholders and other individuals exercised a portion
of their options available under the stock option plans above. In connection
therewith, these individuals issued promissory notes to the Company whereby the
individuals are obligated to pay a total of $221,250, plus interest at 4% per
annum, due on June 30, 1999, secured by the related shares of common stock.

Stock Issuances
---------------

During 1997, the Company sold 52,034 units at $8.00 per unit. Each unit consists
of two shares of the Company's common stock and one warrant to purchase one
share of the Company's common stock at $5.50 per share, subject to adjustments
as defined, over a two-year period, expiring on January 31, 1999. The warrants
are subject to redemption, at anytime, by the Company at $.02 per warrant on 20
days prior notice. Proceeds to the Company were $314,045, net of offering costs
of $102,227.

During 1997, the Company issued 250,000 shares of its previously unissued common
stock in lieu of a deposit under the terms of a satellite equipment lease. Under
the terms of the lease, the Company is to receive the stock back if they do not
default under the lease. The Company has recorded such as an issuance of common
stock and an offset to treasury stock until they receive the stock back at which
time such will be retired.

During 1997, the Company issued 9,600 shares of its common stock for services
rendered and recorded $35,800 as compensation expense.

Subsidiary Options
------------------

The Outdoor Channel, Inc. has 1,750,000 options outstanding as of December 31,
1997 at an exercise price of $1.50.


                                      -50-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 7 - COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS
------------------------------------------------------------------

The Company is leasing its administrative facilities from a stockholder under an
agreement which requires monthly rent payments of approximately $0.34 per square
foot. The term of this lease is from January 1997 to December 2000. The building
serves as security under the terms of the note receivable from the stockholder.
The note receivable from stockholder, in the amount of $194,786 at December 31,
1997, plus interest at six percent, is due in 2000. Rent expense is applied as a
reduction of the note receivable. Rent expense applied against the stockholder
note totaled $85,271 and $67,617 for the years ended December 31, 1997 and 1996,
respectively.

The Company initiated an agreement with one of its directors during 1994 to
receive legal services on a monthly basis. The agreement calls for the Company
to pay the director a monthly retainer in the amount of $5,000. In the event
that services rendered by the director on behalf of the Company exceed $5,000 in
any given month, the agreement calls for the director to defer payment of such.
During 1997, the Company deferred $200,000 to such director. Such amount is
included in the accompanying balance sheet as of December 31, 1997.

The Company is party to various other lawsuits which have arisen in the normal
course of its business. Certain matters are covered by insurance, after the
Company meets certain deductible requirements. The liability, if any, arising
from unfavorable outcomes of the aforementioned lawsuits is presently unknown.

In December 1997, intercompany advances outstanding of $4,121,375 were
contributed by the Company to The Outdoor Channel, Inc. in exchange for
4,500,000 shares of The Outdoor Channel, Inc.'s previously unissued common
stock.


                                      -51-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 8 - INCOME TAXES
---------------------

The components of the benefit for income taxes for the years ended December 31,
1997 and 1996 are summarized as follows:

                                                     1997                1996
                                                 -----------         -----------

      Current:
              Federal                            $        -          $ (847,159)
              State                                     800            (149,499)
                                                 -----------         -----------
                                                        800            (996,658)
                                                 -----------         -----------

      Deferred:
              Federal                                     -             662,000
              State                                       -             117,000
                                                 -----------         -----------
                                                          -             779,000
                                                 -----------         -----------

         Change in estimate                         (81,015)                  -
                                                 -----------         -----------

                                                 $  (80,215)         $ (217,658)
                                                 ===========         ===========

The following table reconciles the federal statutory income tax rate to the
effective tax rate of the benefit for income taxes:

                                                     1997                1996
                                                 -----------         -----------

         Federal statutory income tax rate           (34.0)%             (34.0)%
         State income taxes, net of federal benefit   -                   (5.6)
         Effect of net operating loss carryforward
          not utilized                                34.5                14.6
         Valuation of temporary differences            -                  15.3
         Change in estimate                           (5.0)                -
         Other                                         -                   2.4
                                                 -----------         -----------

           Effective tax rate                         (4.5)%              (7.3)%
                                                 ===========         ===========


                                      -52-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 8 - INCOME TAXES, continued
--------------------------------

                                            1997                    1996
                                       ----------------       ----------------

         Bad debts                     $        20,000        $        17,000
         Depreciation                           80,000                 95,000
         Accruals                              199,000                 57,000
         Deferred revenue                      889,000                743,000
         Net operating loss                    712,000                371,000
                                       ----------------       ----------------
                                             1,900,000              1,283,000

         Valuation allowance                (1,900,000)            (1,283,000)
                                       ----------------       ----------------

                                       $             -        $             -
                                       ================       ================

The Company has available for federal and state income tax purposes, net
operating loss carryforwards of approximately $1,889,000 and $1,278,000,
respectively, which expire in the year 2012.

NOTE 9 - LEASE AGREEMENTS
-------------------------

The Company leases its facilities and certain equipment under noncancelable
operating leases which expire at various dates through December 2004. In 1995,
under the terms of an operating lease, the Company acquired certain rights to
utilize certain satellite equipment. This lease was to expire on July 7, 1998.
The Company terminated this agreement on March 1, 1997 and entered into a new
satellite equipment lease that will expire on June 30, 1998. This agreement
requires monthly payments of $115,000 during the period March 1, 1997 through
June 30, 1997, $150,000 through October 31, 1997, $170,000 through February 28,
1998 and $190,000 through June 30, 1998. On May 27, 1998 and July 14, 1998, the
Company entered into two two-month extensions of the satellite equipment lease
that require monthly lease payments of $170,000 for July 1998 and $150,000 per
month for August 1998 through October 1998. In addition, the Company has entered
into two other leases to obtain access to certain satellite equipment. These
agreements require monthly payments of $5,500 during the period March 1, 1995
through February 28, 1996, $10,500 through August 31, 1997, $15,500 through May
31, 1999, $25,500 through June 30, 1999, $35,000 through August 31, 2004.
Certain leases contain stepped rent periods throughout the lease. The Company
recognizes the related rental expenses on a straight-line basis and records the
difference between the expense charged to operations and amounts


                                      -53-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 9 - LEASE AGREEMENTS, continued
------------------------------------

paid under the lease as deferred rent. As of December 31, 1997, the Company has
recorded a deferred rent obligation of $283,262 in the accompanying financial
statements. The total minimum rental commitment under these operating lease
agreements, including amendments, is as follows:

                  Years Ending December 31,
                  --------------------------
                           1998                  $      1,921,651
                           1999                           411,783
                           2000                           447,081
                           2001                           420,000
                           2002                           420,000
                           Thereafter                     700,000
                                                 -----------------

                                                 $      4,320,515
                                                 =================

On October 23, 1996 the Company entered into a satellite equipment lease
agreement which will become effective when the subject satellite is place into
service. The agreement requires monthly lease payments of $70,000 for the first
month and increasing by $10,000 per month for months two through five, beginning
on the six month through the one hundred and second month the monthly lease
payment is $120,000, beginning on the one hundred and third month through the
one hundred and forty-forth month the monthly lease payment is $140,000. As of
the date of these financial statements, the satellite equipment has not been
placed in service.

During the years ended December 31, 1997 and 1996, the Company incurred
$2,082,369 and $1,490,812, respectively, in rent expense.



                                      -54-
<PAGE>


                     GLOBAL OUTDOORS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


NOTE 10 - SEGMENT INFORMATION
-----------------------------

Reportable business segments for the years ended December 31, 1997 and 1996 are
as follows:
<TABLE>
<CAPTION>

                                            INCOME                                                 ADDITIONS TO
                                            (LOSS)                           DEPRECIATION      PROPERTY, EQUIPMENT
                                            BEFORE                               AND               AND LEASEHOLD
                          REVENUES       INCOME TAXES         ASSETS         AMORTIZATION          IMPROVEMENTS
                        ------------     ------------    -------------     ---------------     -------------------

 
1997

<S>                     <C>              <C>             <C>               <C>                  <C>         
Alaska trip             $ 1,027,354      $    99,322     $  1,628,407      $     72,934         $     73,420
The Outdoor Channel       1,618,870       (2,262,381)         820,518            94,187               18,558
Membership sales
  of recreational
  prospecting and
  mineral rights and
  merchandise sales       3,299,533        1,222,758        1,020,239             9,805               35,033
Other                       363,660         (854,035)         863,271            45,611                    -
                        ------------     ------------    -------------     -------------        -------------

                        $ 6,309,417      $(1,794,336)    $  4,332,435      $    222,537         $    127,011
                        ============     ============    =============     =============        =============

</TABLE>

<TABLE>
<CAPTION>

                                            INCOME                                                 ADDITIONS TO
                                            (LOSS)                           DEPRECIATION      PROPERTY, EQUIPMENT
                                            BEFORE                                AND              AND LEASEHOLD
                          REVENUES       INCOME TAXES         ASSETS         AMORTIZATION          IMPROVEMENTS
                        ------------     ------------    -------------     ---------------     -------------------
1996

<S>                     <C>              <C>             <C>               <C>                  <C>         
Alaska trip             $   828,901      $   158,678     $  1,465,608      $     69,700        $      54,365
The Outdoor Channel         743,143       (1,983,518)         679,519           100,197              321,616
Membership sales
  of recreational
  prospecting and
  mineral rights and
  merchandise sales       3,399,420          150,841        1,047,250            36,667              357,930
Other                       286,544       (1,320,359)       1,033,521            56,580              185,400
                        ------------     ------------    -------------     -------------        -------------

                        $ 5,258,008      $(2,994,358)    $  4,225,898      $    263,144         $    919,311
                        ============     ============    =============     =============        =============
</TABLE>

NOTE 11 - SUBSEQUENT EVENT
--------------------------

Subsequent to December 31, 1997 and as of October 30, 1998, 877,000 shares of
The Outdoor Channel, Inc.'s common stock were issued to outside parties for
$1,003,000, decreasing the Company's ownership interest in The Outdoor Channel
to 88%.


                                      -55-
<PAGE>


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

         Not Applicable.

                                    PART III

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

The directors, executive officers and key employees of the Company are as
follows:
<TABLE>
<CAPTION>

         NAME                         AGE                                       POSITION 
         ----                         ---                                       --------
     <S>                               <C>           <C>                  
     Perry T. Massie                   36            Chief Executive Officer, President and Chairman of the Board

     Thomas H. Massie                  33            Executive Vice President, Secretary and Director

     Richard K. Dickson II             52            Senior Vice President, General Counsel and Director

     Andrew J. Dale                    44            President and Chief Operating Officer of The Outdoor Channel

     Jacob J. Hartwick                 45            Vice President Sales and Promotions and Executive Vice
                                                     President of The Outdoor Channel

     Wade E. Sherman                   27            Vice President Advertising Sales of The Outdoor Channel

     Richard D. Vermeer                59            Chief Financial Officer

</TABLE>

     The term of each director will expire at the 1999 annual meeting of
stockholders and when a successor is elected and qualified or upon his earlier
death, resignation or removal. Officers serve at the discretion of the Board of
Directors.

     PERRY T. MASSIE has served as Chief Executive Officer of the Company since
1986, has served as President and Chairman of the Board since 1994. From 1986
until January 1996, Mr. Massie served as Chief Financial Officer of the Company.
He has been the Managing Editor of the Gold Prospector Magazine since 1988. Mr.
Massie earned a Bachelor of Science degree in Mining Engineering from the
University of Alaska, Fairbanks in June 1986. Perry T. Massie is the brother of
Thomas H. Massie.

     THOMAS H. MASSIE has served as Secretary and a director of the Company
since 1984, and has served as Executive Vice President of the Company and the
President of Gold Prospectors' Association of America, Inc. since 1994. Mr.
Massie is also the host of the "Gold Prospecting Show." He attended the
University of Alaska, Fairbanks from 1984 to 1986, studying business
administration. Thomas H. Massie is the brother of Perry T. Massie.

     RICHARD K. DICKSON II has served as Senior Vice President, General Counsel
and a director of the Company since 1994. From November 1984 until 1994, Mr.
Dickson served as the Company's corporate counsel and has been a practicing
attorney, specializing in corporate and securities law, with his own firm since
1979. Mr. Dickson served as an attorney with the California Department of
Corporations from 1976 to 1979. He earned a Bachelor of Science degree in
Business Administration from the University of California, Berkeley in 1968, a
Masters in Business Administration from the University of Southern California in
1970 and a law degree from the University of the Pacific in 1976.


                                      -56-
<PAGE>


     ANDREW J. DALE has served as President and Chief Operating Officer of The
Outdoor Channel since November 1997. From November 1994 to November 1997 he was
Senior Vice President Operations of The Outdoor Channel. From 1990 to 1993, he
has acted as a video and television consultant to both Global Outdoors, Inc. and
The Outdoor Channel. From 1989 to 1994, Mr. Dale was a production manager at
Vidfilm Services, a major Hollywood post-production facility, whose clients
include Disney, MCA, Columbia and a host of other major studios. Mr. Dale was
born and raised in the United Kingdom.

     JACOB J. HARTWICK has served as Vice President of Sales and Promotions of
the Company since 1994 and Executive Vice President of The Outdoor Channel since
November 1997. From 1994 to November 1997, he was Vice President Sales and
Promotions of The Outdoor Channel. From 1991 to 1994, he served as a Vice
President of the Company. From 1986 through 1991, Mr Hartwick served in various
sales, marketing and administrative positions with Global Outdoors and its
subsidiaries.

     WADE E. SHERMAN has been Vice President Advertising Sales of the Company
since November 1997. In February 1996, he was hired by the Company as an
Advertising Sales Representative and was promoted to Director of Advertising
Sales in July 1996. From April 1995 to February 1996, Mr. Sherman was an
Advertising Sales Representative for Comcast Cablevision. From May 1994 to April
1995, he worked at radio station KMNY, as a news anchor and an advertising sales
representative. From 1993 to April 1994, he worked part-time at radio station
KMNY. He earned a B.S. Degree in Television/Film from California State
University at Fullerton.

     RICHARD D. VERMEER has served as the Chief Financial Officer of the Company
since November 1997. From 1994 to the present he has been the President of The
Richards Group, a consulting firm that advises clients on a variety of financial
and management matters. From 1989 to 1994, he served as Senior Vice President
Finance/Administration for International Permalite, Inc., a roofing
manufacturing company. Mr. Vermeer earned a B.S. degree in Business Management
from Fairleigh Dickinson University and an M.B.A.
degree in Finance from Lehigh University.


COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

     Based solely upon its review of the copies of reports furnished to the
Company, or representations that no annual Form 5 reports were required, the
Company believes that all filing requirements under Section 16(a) of the
Exchange Act applicable to its directors, officers and any persons holding ten
percent (10%) or more of the Company's Common Stock with respect to the
Company's fiscal year ended December 31, 1997, were satisfied, except that Wilma
M. Massie and Perry T. Massie filed reports on Form 5 instead of on Form 4.


BOARD OF DIRECTORS

     The Board of Directors of the Company took action by unanimous written
consent or held meetings six (6) times during the fiscal year ended December 31,
1997. Each incumbent Director attended at least seventy-five percent (75%) of
the aggregate of the number of meetings of the Board and the number of meetings
held by all committees of the Board on which he or she served. The Company does
not have any standing committees. In July 1996, the Company amended its Articles
of Incorporation to authorize the Board of Directors to be increased to a
maximum of seven directors.


                                      -57-
<PAGE>


ITEM 10.  EXECUTIVE COMPENSATION.

     The following table sets forth compensation received for the fiscal years
ended December 31, 1997, 1996 and 1995 by the Company's Chief Executive Officer,
and the other executive officers whose salary and bonus exceeded $100,000 for
fiscal year 1997, 1996 and 1995 (collectively, the "Named Executive Officers"):
<TABLE>

                           SUMMARY COMPENSATION TABLE
<CAPTION>

                                                     Annual Compensation                    Long Term Compensation

                                                                                     Securities
                                                                  Other                Under-
                                                                 Annual    Restricted  laying                All Other
                                                                 Compen-     Stock    Options/     LTIP       Compen-
Name and Principal Position    Year     Salary($)     Bonus($)   sation($)   Awards     /SARS     Payouts     sation
---------------------------    ----     ---------    ---------  --------   ---------- ----------  --------  ----------

<S>                            <C>       <C>           <C>            <C>       <C>       <C>        <C>        <C>
Perry T. Massie, CEO           1997      69,231           -           -         -         -          -          -
                               1996      84,000           -           -         -         -          -          -
                               1995      52,000        10,500         -         -         -          -          -

Christopher B. Forgy           1997      157,846          -           -         -         -          -          -
                               1996      165,000          -           -         -         -          -          -

Richard K. Dickson II          1997      120,000          -           -         -         -          -          -
                               1996      120,000          -           -         -         -          -          -
                               1995      120,000          -           -         -         -          -          -

</TABLE>

      Mr. Dickson's compensation has been established at $120,000 per year,
payable $60,000 in cash and $60,000 in either cash or stock which latter amount
may be deferred, in whole or part. For 1997, $60,000 was deferred; for 1996,
$50,000 was deferred; and for 1995, $30,000 was deferred. Such deferred amounts
will be paid in either cash or stock at such time as is agreed upon by Mr.
Dickson and the Company. Mr. Forgy's employment with The Outdoor Channel ended
in November 1997.


                                      -58-
<PAGE>

<TABLE>

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>

                                             % of Total
                                               Options                                   Potential Realizable
                        Number of              Granted                                     Value at Assumed
                       Securities                to            Exercise                  Annual Rates of Stock
                       Underlying             Employees         or Base                 Price Appreciation for
                         Options              in Fiscal          Price     Expiration       Option Term(2)       
           Name         Granted (#)            Year(1)         ($/Share)      Date        5%($)           10%($)
----------------------------------------------------------------------------------------------------------------

<S>                          <C>                  <C>              <C>          <C>         <C>              <C>
Perry T. Massie, CEO         -                    -                -            -           -                -

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

</TABLE>

<TABLE>
               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES
<CAPTION>

                                                   Number of Securities Underlying       Value of Unexercised
                           Shares                        Unexercised Options             in-the-Money Options
                         Acquired On     Value          at Fiscal Year-End(#)            at Fiscal Year-End($)    
           Name          Exercise(#)  Realized($)   Exercisable     Unexercisable    Exercisable    Unexercisable  
-------------------------------------------------------------------------------------------------------------------
<S>                          <C>           <C>         <C>                   <C>             <C>             <C>       
Perry T. Massie, CEO         -             -           85,000                -               -               -

Thomas H. Massie             -             -           85,000                -               -               -

Richard K. Dickson II        -             -           25,000                -               -               -

</TABLE>

     The exercise price of the options listed above for Messrs. Perry T. Massie
and Thomas H. Massie are $2.25 per share for 50,000 shares and $2.50 per share
for 35,000 shares. The exercise price of the options listed above for Mr.
Dickson is $2.25. The Closing Price of Global's Common Stock at 1997 fiscal
year-end was $2.25 per share.


STOCK OPTION PLANS

         On May 26, 1993, the Company adopted two stock option plans ("Plan 1
Stock Options" and "Plan 2 Stock Options"). Plan 1 Stock Options are for persons
who held stock options prior to the adoption of Plan 1 Stock Options. There are
presently four persons who hold Plan 1 Stock Options for 115,000 shares of
Common Stock exercisable at a price of $2.50 per share. Plan 1 Stock Options are
non-qualified stock options and no further grants will be made under this plan.
Plan 2 Stock Options may be granted to provide incentives to executive officers,
employees and independent consultants. Options to purchase 285,000 may be
granted under Plan 2 Stock Options. Options to purchase 235,000 shares are

outstanding at an exercise price of $2.25 per share leaving options to purchase
50,000 shares available for grant. Plan 1 Stock Options are non-qualified stock
options.

         In September 1995, the Company authorized another stock option plan
(the "1995 Stock Option Plan"). The 1995 Stock Option Plan was approved by the
shareholders of the Company at the Company's 1996 Annual Meeting held on July
16, 1996. The 1995 Stock Option Plan provides for the grant of options to
purchase up to 500,000 shares of Common Stock in order to enhance the Company's
ability to attract and retain the services of qualified employees, officers,
directors, consultants and other service providers. The Company may grant
incentive stock options and nonqualified stock options under the 1995 Stock
Option Plan. There are options to purchase 18,000 shares of Common Stock
outstanding under the 1995 Stock Option Plan. The options which are exercisable
at a price of $3.25 per share were granted to a former employee and a service


                                      -59-
<PAGE>


provider. As of the date of this report, options to purchase 482,000 shares of
Common Stock may be granted under the 1995 Stock Option Plan.


DIRECTOR'S FEES

         The directors of the Company are also executive officers of the
Company. For 1997, directors were not compensated separately or reimbursed for
expenses incurred in attending meetings of the Board of Directors.


BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION

         The Board of Directors has responsibility for matters that would be
handled by the Compensation Committee if Global had such a committee. The Board
has attempted to conserve Global's cash. The Company considers services
rendered, nature of the services, quality of performance, past practice,
conservation of cash and amount of present stock ownership in determining
executive compensation. The Company desires to encourage performance by stock
ownership.


EMPLOYMENT CONTRACTS

         The Company does not have any employment contracts.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 31, 1997 by
each director and executive officer of the Company, each person known to the
Company to be the beneficial owner of more than 5% of the outstanding Common
Stock, and all directors and executive officers of the Company as a group.
Except as otherwise indicated below, the Company believes that each person
listed below has sole voting and investment power with respect to the shares
owned, subject to applicable community property laws.


                                      -60-
<PAGE>


       NAME AND ADDRESS OF BENEFICIAL                  SHARES BENEFICIALLY
         OWNER OR IDENTITY OF GROUP                          OWNED(1)
--------------------------------------------       --------------------------
                                                    NUMBER            PERCENT
                                                   ---------          -------
Wilma M. Massie (3).........................       1,401,926             31%

Perry T. Massie (4)(5)......................       1,245,196             28%

Thomas H. Massie (6)(7).....................       1,262,700             28%

Richard K. Dickson II (8)...................         301,550              7%

USA Networks (9)............................         250,000              6%

David M. Ashwood (10).......................         114,070              3%

Andrew J. Dale (11).........................          25,000              1%

Jacob J. Hartwick (12)......................          30,904              1%

All directors and Named
Executive Officers as a
group (5 persons) (13)......................       2,865,350             62%

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

(1)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Shares of Common Stock
         subject to options or warrants currently exercisable or convertible, or
         exercisable or convertible within 60 days of November 10, 1998, are
         deemed outstanding for computing the percentage of the persons holding
         such options but are not deemed outstanding for computing the
         percentage of any other person.
(2)      The address of each shareholder, except USA Networks, is c/o Global
         Outdoors, Inc., 43445 Business Park Dr., Suite 113, Temecula,
         California 92590. USA Networks address is 1230 Avenue of the Americas,
         New York, New York 10020.
(3)      Includes 95,000 shares subject to options from the Company exercisable
         within 60 days of November 10, 1998.
(4)      Includes 85,000 shares subject to options from the Company and 160,000
         shares subject to options from Wilma M. Massie exercisable within 60
         days of November 10, 1998.
(5)      8,500 of the shares shown are owned jointly by Perry T. Massie and his
         wife, Sandy Massie, who share voting and investment power with respect
         to such shares.
(6)      Includes 85,000 shares subject to options from the Company and 160,000
         shares subject to options from Wilma M. Massie exercisable within 60
         days of November 10, 1998.
(7)      8,500 of the shares shown are owned jointly by Thomas H. Massie and his
         wife, Cindy Massie, who share voting and investment power with respect
         to such shares.
(8)      Includes 25,000 shares subject to options from the Company and 200,000
         shares subject to options from Wilma M. Massie exercisable within 60
         days of November 10, 1998.
(9)      In 1997, USA Networks was issued 250,000 shares of Common Stock in lieu
         of a deposit under the terms of a satellite equipment lease. Under the
         terms of the lease, the Company is to receive the stock back if it does
         not default under the lease. This lease ended in October 1998, and the
         250,000 shares were returned to the Company in November 1998.
(10)     Includes 20,000 shares subject to options from the Company and 80,000
         shares subject to options from Wilma M. Massie exercisable within 60
         days of November 10, 1998.
(11)     Includes 20,000 shares subject to options from the Company exercisable
         within 60 days of November 10, 1998.


                                      -61-
<PAGE>


(12)     Includes 20,000 shares subject to options from the Company exercisable
         within 60 days of November 10, 1998.
(13)     Includes directors' and executive officers' shares listed above,
         including 235,000 shares subject to options from the Company and
         600,000 shares subject to options from Wilma M. Massie exercisable
         within 60 days of November 10, 1998.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The Company is leasing its administrative facilities from Wilma M.
Massie, a shareholder of the Company and the mother of Perry T. Massie and
Thomas H. Massie, under a lease agreement (the "Lease") currently requiring
monthly rent payments of $4,250. Rent expense totaled $85,271 and $67,617 for
the years ended December 31, 1997 and 1996, respectively. The total rent
commitment at December 31, 1997 is three years. In 1997 and 1996, the rent
expense for the Company included rent for The Outdoor Channel. Commencing
January 1998, The Outdoor Channel was responsible for its own rent and entered
into a separate lease agreement ("Channel Lease") with Wilma M. Massie to lease
facilities for The Outdoor Channel. The Channel Lease currently requires monthly
rent payments of $4,000 with the total commitment being four years.

         The rent expense from the Company is applied as a reduction of a note
receivable from Wilma M. Massie, the balance outstanding on which was $194,786
and $280,057, December 31, 1997 and 1996, respectively. The note bears interest
at 6%.

         As of December 31, 1997, the Company owed Wilma M. Massie $50,378,
secured by a motor home purchased in October 1996. The Company is paying this
obligation at the rate of $520 per month including interest at 9%.

         In January 1998, the Company entered a ten year contract with the
Outdoor Channel whereby the Company has the rights to ten hours of programming
time and thirty sixty second advertising spots per week. The Company has the
option to renew this contract for two five year periods. For the first five
years of the contract, the Company is paying $7,400 per week under the contract.
The Company believes that the contract is initially beneficial to The Outdoor
Channel but that in the future will constitute a significant asset to the
Company.

         On February 10, 1995, the Company acquired 100% of the stock of GPAA in
exchange for 2,500,000 shares of its Common Stock (the "Acquisition"). The
acquisition agreement provided for the issuance of up to an additional 1,500,000
shares of Common Stock ("Earn Out Shares") to the former shareholders of GPAA if
GPAA achieved certain earnings or valuation milestones. The former shareholders
of GPAA, Perry T. Massie, Thomas H. Massie, and Wilma M. Massie, are
shareholders of the Company and Messrs. Perry and Thomas Massie are officers of
the Company. For purposes of the Acquisition, the value of the Global Common
Stock was deemed to be $3.50 per share with the initial total acquisition cost
being $8,750,000. For accounting purposes, the assets of GPAA are recorded at
their historical cost basis in a manner similar to a pooling of interest. To
date, no Earn Out Shares have been issued.

         The 1,500,000 Earn Out Shares will be unissued or held in escrow by
Global's Transfer Agent for the benefit of the former shareholders of GPAA. All
or part of such shares are to be delivered to the former shareholders of GPAA in
the amounts set forth below if GPAA achieves the cumulative levels of earnings
after deduction of income taxes, set forth below during the period beginning
January 1, 1995 and ending March 31, June 30, September 30 or December 31, in
1995, 1996, 1997, and 1998.
                                                   The Number of Earn Out Shares
                If Cumulative Earnings               to be Delivered to Former
                   Are Not Less Than                     GPAA Shareholders 
                ----------------------             -----------------------------
                      $1,500,000                      500,000
                      $2,000,000                      an additional 500,000
                      $2,700,000                      an additional 500,000


                                      -62-
<PAGE>


         Alternatively, in recognition of the fact that a significant expansion
of The Outdoor Channel is being conducted and that such expansion, while
potentially increasing the value of GPAA, may not be reflected in earnings, the
below listed valuation earn out formula may be used. The valuation must be made
by an independent certified public accountant or independent unaffiliated
appraiser. The time periods listed above for earnings also apply for the
valuation.

                                                   The Number of Earn Out Shares
                 If Valuation of GPAA                to be Delivered to Former
                   Is Not Less Than                      GPAA Shareholders 
                 --------------------              -----------------------------
                     $12,000,000                      500,000
                     $16,000,000                      an additional 500,000
                     $21,000,000                      an additional 500,000

         The Company intends to have GPAA appraised before the end of 1998. Due
to the significant value that has been added to GPAA by its ownership interest
in The Outdoor Channel, the Company believes it will be delivering Earn Out
Shares to the former GPAA shareholders. The potential number of shares to be
delivered to such persons is 1,500,000 shares. After 1998, Earn Out Shares which
are not delivered to the former shareholders of GPAA are to be considered void.
While unissued or held in escrow, the former shareholders of GPAA will not be
able to vote such shares and will not be entitled to receive any dividends
thereon.

         The Company has an agreement with Richard K. Dickson II, a director and
officer of the Company, to provide legal services for a monthly amount of $5,000
in cash and an additional $5,000 to be paid in cash or Common Stock as is agreed
upon by the Company and Mr. Dickson. In the event it is agreed that Mr. Dickson
should accept stock, the agreement calls for Mr. Dickson to receive shares of
the Company's Common Stock at the market value of the stock at the time the
services were rendered. For 1996, Mr. Dickson was paid $70,000 and was entitled
to receive $50,000 worth of Common Stock or cash pursuant to this agreement. For
1997, Mr. Dickson was paid $60,000 and was entitled to receive $60,000 worth of
Common Stock or cash pursuant to this agreement. Total deferred compensation due
Mr. Dickson at the end of 1997 was $200,000.

         Perry T. Massie and Thomas H. Massie each have an option to purchase
160,000 shares of the Company owned by Wilma M. Massie and an option to purchase
up to 96,000 shares of Wilma Massie's Earn Out Shares. Mr. Dickson has an option
to purchase 200,000 shares of the Common Stock of the Company owned by Wilma
Massie and has an option to purchase up to 150,000 shares of Wilma Massie's Earn
Out Shares. In January 1996, Mr. Dickson exercised an option to purchase 50,000
shares of his option from Wilma M. Massie. David M. Ashwood, an officer of the
Company, has an option to purchase 80,000 shares of the Common Stock of the
Company owned by Wilma Massie and has an option to purchase up to 34,000 shares
of Wilma Massie's Earn Out Shares.

         In November 1996, Wilma M. Massie, a principal shareholder of the
Company, obtained a letter of credit for $80,000 that was utilized as security
for performance under the Agreement with Pan Am Sat for its Galaxy 10 satellite
transponder. The Outdoor Channel has agreed to reimburse Mrs Massie for expenses
in maintaining that letter of credit. From January 1997 through August 1997,
Mrs. Massie loaned the Company $324,000 on notes bearing interest at 10%. From
January 1997 through August 1997, Perry T. Massie loaned the Company $136,000 on
notes bearing interest at 10%. In September 1997, Wilma M. Massie invested
$40,000 in the Company's public offering and Perry T. Massie invested $24,000 in
the Company's public offering. They paid the same price as other purchasers
which was $8.00 per Unit, each Unit consisting of two (2) shares of Common Stock
and one (1) Class F Warrant to purchase Common Stock.

         In December 1997, intercompany advances outstanding of $4,121,375 were
contributed by the Company to The Outdoor Channel, Inc. in exchange for
4,500,000 shares of The Outdoor Channel, Inc.'s previously unissued Common
Stock.

         Perry Massie, Thomas Massie and Richard K. Dickson II are officers and
directors of the Company and The Outdoor Channel, Inc. Jacob J. Hartwick is an
officer of the Company and an officer of The Outdoor Channel, Inc. Wilma M.
Massie is a principal shareholder of the Company and a director of The Outdoor
Channel, Inc. In December 1997, Messrs. P. Massie, T. Massie, Dickson, Hartwick
and Mrs. Massie were granted options to purchase 200,000 shares, each, of Common
Stock in The Outdoor Channel, Inc. The options are exercisable a $1.50 per share
and expire on December 31, 2003. At the time of the grants, The Outdoor Channel
was selling Common Stock in its private placement at $1.00 per share.


                                      -63-
<PAGE>


         The transactions between the Company and the Company's management and
significant shareholders are believed by management of the Company to have been
on terms no less favorable to the Company than those that could have been
obtained from unaffiliated parties


                                      -64-
<PAGE>


                                     PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)       Exhibits:


Exhibit
Number                              Description
-------                             -----------

3                 Articles of Incorporation and by-laws, as amended*

4                 Instruments defining the rights of securityholders, including
                  debentures*

10.1              Form of Plan 1 Stock Option Agreement (incorporated by
                  reference to Exhibit 10.1 to the Company's Form 10-Q for the
                  quarter ended September 30, 1993).

10.2              Form of Plan 2 Stock Option Agreement (incorporated by
                  reference to Exhibit 10.2 to the Company's Form 10-Q for the
                  quarter ended September 30, 1993).

10.3              Form of loan agreement for the exercise of Stock Options
                  (incorporated by reference to Exhibit 10.3 to the Company's
                  Form 10-Q for the quarter ended September 30, 1993).

10.4              Letter of intent dated August 27, 1993, regarding the proposed
                  acquisition of Gold Prospector's Association of America, Inc.
                  by the Company (incorporated by reference to Exhibit 10.4 to
                  the Company's Form 10-Q for the quarter ended September 30,
                  1993).

10.5              Agreement and Plan of Reorganization dated February 13, 1995,
                  by and between the Registrant and Gold Prospector's
                  Association of America, Inc. (incorporated by reference to
                  Exhibit B to the Company's Form 8-K dated February 13, 1995).

10.6              The Company's 1995 Stock Option Plan (incorporated by
                  reference to Exhibit 10.6 to the Company's Form 10-KSB for the
                  year ended December 31, 1995).

10.7              Employment Agreement dated October 16, 1995 between the
                  Company and Christopher B. Forgy (incorporated by reference to
                  Exhibit 10.7 to the Company's Form 10-KSB for the year ended
                  December 31, 1995).

10.8              Stock Option Agreement dated February 6, 1996 between the
                  Company and Christopher B. Forgy (incorporated by reference to
                  Exhibit 10.8 to the Company's Form 10-KSB for the year ended
                  December 31, 1995).

16                Letter re change in certifying accountant (incorporated by
                  reference to Exhibit 16 to the Company's Form 8-K Amendment
                  No.1 dated March 26, 1996).

16.1              Letter re change in certifying accountant (incorporated by
                  reference to Exhibit 16.3 to the Company's Form 8-K Amendment
                  No.1 filed December 3, 1996).

16.2              Letter re change in certifying accountant (incorporated by
                  reference to Exhibit 16.1 to the Company's Form 8-K filed
                  March 10, 1998).

21                Subsidiaries of Registrant*


                                      -65-
<PAGE>


23                Consent of experts and counsel*

27                Financial Date Schedule (SEC only).

99.1              Consolidated Financial Statements for Gold Prospector's
                  Association of America, Inc. ("GPAA") for the years ended
                  December 31, 1994, and February 28, 1994 and 1993
                  (incorporated by reference to Exhibit 99.1 to the Company's
                  Form 10-K for the year ended December 31, 1994).

99.2              Pro Forma combined Financial Statements for the Registrant and
                  GPAA for the years ended December 31, 1994, 1993 and 1992
                  (incorporated by reference to Exhibit 99.2 to the Company's
                  Form 10-K for the year ended December 31, 1994).


*        Incorporated by reference from S-1 Registration Statement filed with
         the SEC June 21, 1989; Amendment No.1 thereto filed on November 28,
         1989; Amendment No. 2 thereto filed on January 10, 1990; Amendment No.
         3 thereto filed on February 7, 1990; SB-2 Registration Statement filed
         with the SEC August 5, 1996; Amendment No. 1 thereto file on January
         27, 1997; and Amendment No. 2 thereto filed January 30, 1997.

(b)      The company filed the following reports on Form 8-K during the quarter
         ended December 31, 1997, as follows:  None


                                      -66-
<PAGE>


                                   SIGNATURES

         In accordance with section 13 or 15 (d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


(Registrant) GLOBAL OUTDOORS, INC.


By: (Signature and Title) /s/Perry T. Massie                        
                          -------------------------------------------
                          Perry T. Massie, President

Dated: December 16, 1998
       -----------------

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated:



By: (Signature and Title) /s/Perry T. Massie                        
                          -------------------------------------------
                          Perry T. Massie, President, CEO, and Director

Dated: December 16, 1998
       -----------------


By: (Signature and Title) /s/Thomas H. Massie                       
                          -------------------------------------------
                          Thomas H. Massie, Executive VP, Secretary and Director

Dated: December 16, 1998
       -----------------


By: (Signature and Title) /s/Richard K. Dickson II                             
                          -------------------------------------------
                          Richard K. Dickson II, Senior VP, General Counsel and
                                                 Director

Dated: December 16, 1998
       -----------------


By: (Signature and Title) /s/Richard D. Vermeer                             
                          -------------------------------------------
                          Richard D. Vermeer, Chief Financial Officer

Dated: December 16, 1998
       -----------------



                                      -67-
<PAGE>

                                   EXHIBIT 27

                             FINANCIAL DATA SCHEDULE