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

                                   FORM 10-QSB
                                   -----------

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

                   For quarterly period ended: March 31, 2004

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

             For the transition period from __________ to __________

                        Commission file number: 000-28007
                                                ---------

                          GOLFGEAR INTERNATIONAL, INC.
                          ----------------------------
                 (Name of small business issuer in its charter)

                      NEVADA                                    43-1627555
---------------------------------------------             --------------------
(State or other jurisdiction of incorporation              (I.R.S. Employer
                or organization)                          Identification  No.)

   11562 KNOTT AVENUE. SUITE 9, GARDEN GROVE                    90067-2320
   -----------------------------------------                    ----------
   (Address of principal executive offices)                     (Zip Code)

Issuer's telephone number including area code:  (714) 892-8889

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

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

                         COMMON STOCK, $0.001 PAR VALUE
                         ------------------------------
                                (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 [X]
No [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the registrant  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 ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of July 8, 2005: 42,203,966

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

Transitional Small Business Disclosure Format (Check One):  Yes:    ; No:  X
                                                                ----     ----

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

<PAGE>

                                TABLE OF CONTENTS

Part I - Financial Information                                              Page

     Item 1.    Financial Statements...........................................

                Condensed Consolidated Balance Sheet as of March 31, 2004....F-1

                Condensed Consolidated Statements of Operations for the
                three months ended March 31, 2004 and 2003...................F-2

                Condensed Consolidated Statements of Cash Flows for the

                three months ended March 31, 2004 and 2003...................F-3

                Notes to Condensed Consolidated Financial Statements.........F-4

     Item 2.    Management's Discussion and Analysis of

                Financial Condition and Results of Operations..................1

     Item 3.    Controls and Procedures........................................6

Part II - Other Information

     Item 1.    Legal Proceedings..............................................7

     Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds ...7

     Item 3.    Defaults Upon Senior Securities................................7

     Item 4.    Submission of Matters to a Vote of Securities Holders..........7

     Item 5.    Other Information..............................................7

     Item 6.    Exhibits ......................................................7

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

<PAGE>

                  GOLFGEAR INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2004
                                   (UNAUDITED)

Part I - Financial Information

Item 1.  Financial Statements

<TABLE>
<CAPTION>
                                 ASSETS
<S>                                                           <C>
Current assets:
     Cash                                                      $      3,316
     Accounts receivable, net of allowance
         for doubtful accounts of $37,869                                --
     Inventories                                                     74,151
     Prepaid expenses                                                51,166
                                                               ------------
Total current assets                                                128,633

Property and equipment, net                                          29,180
Other assets:
     Intangible assets, net                                          69,185
     Deposits                                                         7,770
                                                               ------------
Total assets                                                   $    234,768
                                                               ============

          LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
     Accounts payable and accrued expenses                     $  1,025,388
     Accrued product warranties                                      91,416
     Accrued interest payable                                       184,409
     Bank lines of credit                                            64,688
     Notes payable                                                   33,177
     Convertible debentures due to related parties                1,000,000
     Convertible debentures                                       1,200,000
                                                               ------------
Total current liabilities                                         3,599,078
                                                               ------------
Commitments and contingencies

Stockholders' deficit:
     Preferred stock, $.001 par value; 10,000,000
         shares authorized; none issued and outstanding                  --
     Common stock, $.001 par value; 50,000,000 shares
         authorized; 40,445,076 issued and outstanding               40,445
     Additional paid-in capital                                  14,275,837
     Deferred compensation                                          (55,784)
     Accumulated deficit                                        (17,624,808)
                                                               ------------
Total stockholders' deficit                                      (3,364,310)
                                                               ------------
Total liabilities and stockholders' deficit                    $    234,768
                                                               ============
</TABLE>

         See notes to condensed consolidated financial statements.

--------------------------------------------------------------------------------
Page F-1

<PAGE>

                  GOLFGEAR INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED MARCH 31, 2004 and 2003
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                      2004            2003
                                                 ------------    ------------
<S>                                              <C>             <C>
Net sales                                        $    371,557    $    545,245
Cost of goods sold                                    176,854         328,338
                                                 ------------    ------------
     Gross profit                                     194,703         216,907

Operating expenses:
     Selling and marketing                             87,168         189,951
     Tour and pro contracts                            20,388          21,234
     General and administrative                       298,447         400,041
     Depreciation and amortization                      7,562          21,257
        Total operating expenses                      413,565         632,483
                                                 ------------    ------------
Loss from operations                                 (218,862)       (415,576)

Other income (expense):
     Interest income                                       --           6,809
     Interest expense                              (1,018,764)       (776,930)
     Other, net                                        (5,139)         40,181
                                                 ------------    ------------
        Total expense, net                         (1,023,903)       (729,940)
                                                 ------------    ------------
Loss before provison for income taxes              (1,242,765)     (1,145,516)

Provision for income taxes                              2,400           2,400
                                                 ------------    ------------
Net loss                                         $ (1,245,165)   $ (1,147,916)
                                                 ============    ============

Loss per common share - basic and diluted        $      (0.03)   $      (0.03)
                                                 ============    ============
Weighted average number of common shares
     outstanding - basic and diluted               40,445,076      36,020,321
                                                 ============    ============
</TABLE>

            See notes to condensed consolidated financial statements

--------------------------------------------------------------------------------
Page F-2

<PAGE>

                 GOLFGEAR INTERNATIONAL, INC., AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    2004           2003
                                                                -----------    -----------
<S>                                                             <C>            <C>
Cash flows from operating activities:
     Net loss                                                   $(1,245,165)   $(1,147,916)
     Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
         Amortization of deferred compensation                       11,157          8,367
         Depreciation and amortization                                7,562         21,257
         Accrued interest on stock purchase note receivable              --         (6,805)
         Amortization of debt discount                              977,778        643,565
         Amortization of deferred financing costs                        --         86,009
         Provision for bad debts                                         --         17,758
         Loss on disposal of assets                                   5,963             --
         Gain on settlement of accounts payable                          --        (22,626)
     Changes in operating assets and liabilities:
     (Increase) decrease in:
         Accounts receivable                                        131,395        (29,382)
         Inventories                                                 (4,772)         9,688
         Prepaid expenses                                            23,829          1,669
         Deferred advertising costs                                      --           (600)
     Increase (decrease) in:
         Accounts payable and accrued expenses                      124,515        (40,673)
         Accrued product warranties                                    (267)           147
         Accrued interest payable                                    12,070         37,594
         Deferred licensing revenue                                 (50,303)       (12,031)
                                                                -----------    -----------
     Net cash used in operating activities                           (6,238)      (433,979)
                                                                -----------    -----------
Cash flows used in investing activities:
     Purchases of property and equipment                             (6,250)        (6,251)
                                                                -----------    -----------
Cash flows from financing activities:
     (Repayments) borrowings under bank lines of credit, net        (44,535)        93,627
     Proceeds from issuance of common stock                              --        280,000
     Repayment of convertible debt                                 (100,000)            --
     Collection of amount due from stockholder
         for convertible debenture financing                        100,000             --
     Proceeds from exercise of stock options                             --            250
                                                                -----------    -----------
         Net cash (used in) provided by financing activities        (44,535)       373,877
                                                                -----------    -----------
Net decrease in cash                                                (57,023)       (66,353)

Cash, beginning of period                                            60,339        117,018
                                                                -----------    -----------
Cash, end of period                                             $     3,316    $    50,665
                                                                -----------    -----------
Supplemental disclosures of cash flow information:
Cash paid for interest                                          $    25,778    $     6,761
                                                                ===========    ===========
Cash paid for income taxes                                      $        --    $        --
                                                                ===========    ===========
Supplemental disclosure of non-cash activities:
Settlement of convetible debenture with transfer of inventory   $   100,000    $        --
                                                                ===========    ===========
</TABLE>

           See notes to condensed consolidated financials statements.

--------------------------------------------------------------------------------
Page F-3

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

1.  BASIS OF PRESENTATION

         Management of GolfGear International, Inc. (the "Company) has prepared,
without audit, the accompanying  condensed consolidated financial statements for
the three months ended March 31, 2004 and 2003.  The  information  furnished has
been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial reporting.  Accordingly,
certain disclosures  normally included in a complete set of financial statements
prepared in accordance with GAAP have been condensed or omitted.  In the opinion
of management, all adjustments considered necessary for the fair presentation of
the Company's financial position, results of operations and cash flows have been
included and are only of a normal  recurring  nature.  The results of operations
for the three months ended March 31, 2004 are not necessarily  indicative of the
results  of  operations  for the year  ended  December  31,  2004.  The  interim
condensed  consolidated  financial statements should be read in conjunction with
the audited consolidated financial statements and notes thereto contained in the
Company's Form 10-KSB for the year ended December 31, 2003.

2.  LIQUIDITY AND MANAGEMENT'S PLANS

         During  the  third  quarter  of  2004,  the  Company  suspended  normal
operations,  including  expanding  brands and product  offerings,  new marketing
programs, and direct marketing to customers,  due to a lack of operating working
capital resources.  To the extent that the Company is unable to secure financing
in 2005, the Company's  liquidity and ability to continue to conduct  operations
will be impaired.  The accompanying  consolidated financial statements have been
prepared  assuming  that the Company  will  continue as a going  concern,  which
contemplates  the  realization of assets and the  satisfaction of liabilities in
the normal  course of  business.  Since  inception,  the  Company  has  incurred
recurring  losses  and  requires   additional   capital  to  finance  continuing
operations. The Company incurred a loss of $1,245,165 for the three months ended
March 31, 2004. As of March 31, 2004, the Company had a working  capital deficit
of $3,470,445 and a stockholders'  deficit of $3,364,310.  These factors,  among
others,  raise  substantial  doubt about the Company's  ability to continue as a
going concern. The accompanying  condensed  consolidated financial statements do
not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and  classification of liabilities that may
result should the Company be unable to continue as a going concern.

         The Company is attempting to increase  revenues  through various means,
including expanding brands and product offerings,  new marketing  programs,  and
possibly direct marketing to customers, subject to the availability of operating
working capital resources.  To the extent that the Company is unable to increase
revenues in the next few years, the Company's  liquidity and ability to continue
to conduct operations may be impaired.

         The  Company  will  require   additional   capital  to  fund  operating
requirements.  The  Company  is  exploring  various  alternatives  to raise this
required capital,  including convertible debentures,  private infusion of equity
and various collateralized debt instruments,  but there can be no assurance that
the Company  will be  successful  in this  regard.  To the extent the Company is
unable to secure the capital necessary to fund its future cash requirements on a
timely basis and/or under acceptable terms and conditions,  the Company may have
to substantially  reduce its operations to a level consistent with its available
working capital resources. The Company may also be required to consider a formal
or informal restructuring or reorganization.

         As  discussed  in Note 10 the Company has  secured a  commitment  for a
$10,000,000  private  placement  offering  whereby a third party  investor  will
purchase up to  $10,000,000  of the  Company's  common stock over a  twenty-four
month period to provide the Company with operating  capital.  Funding is subject
to, among other things,  the Company  filing a  registration  statement with the
United States  Securities and Exchange  Commission with respect to the resale of
common stock sold in the private  placement  offering.  The Company is currently
working towards satisfying all conditions  precedent to closing the funding, but
there can be no assurance  that the Company  will be  successful  in  satisfying
these terms.

3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The  summary of  significant  accounting  policies  presented  below is
designed  to  assist  in  understanding  the  Company's  condensed  consolidated
financial  statements.  Such  condensed  consolidated  financial  statements and
accompanying notes are the representations of the Company's  management,  who is
responsible  for their  integrity and  objectivity.  These  accounting  policies
conform to GAAP in all material respects,  and have been consistently applied in
preparing the accompanying condensed consolidated financial statements.

--------------------------------------------------------------------------------
Page F-4

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

Principles of Consolidation

         The condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries,  GGI, Inc., GearFit Golf Company,
Pacific  Golf  Holdings,  Inc.  Bel Air Players  Group,  Inc.  and Leading  Edge
Acquisition,  Inc. All significant  intercompany  transactions and balances have
been eliminated in consolidation. Use of Estimates

         The  preparation of financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities,  disclosure of contingent  assets and liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses during the reporting period.  Significant  estimates made by management
are, among others,  the  realizability  of accounts  receivable and inventories,
recoverability  of  long-lived  assets,  and  valuation  of deferred tax assets.
Actual results could differ from those estimates.

Inventories

         Inventories  are stated at the lower of cost  (first-in,  first-out) or
estimated market,  and consist of raw materials of $30,747 and finished goods of
$43,404.  Market is determined by comparison  with recent sales or estimated net
realizable value.

         Net realizable  value is based on  management's  forecasts for sales of
the Company's  products and services in the ensuing  years and/or  consideration
and analysis of changes in the customer base,  product mix, or other issues that
may  impact  the  estimated  net  realizable  value.  Should  the demand for the
Company's   products  and/or  services  prove  to  be  significantly  less  than
anticipated, the ultimate realizable value of the Company's inventories could be
substantially  less than reflected in the  accompanying  condensed  consolidated
balance sheet.

Property and Equipment

         Property and equipment are stated at cost.  Depreciation is computed on
the  straight-line  method over the  estimated  useful  lives of the assets that
range from five to seven  years.  Leasehold  improvements  are  amortized on the
straight-line method over the term of the lease or the useful life of the asset,
whichever  is  shorter.  Maintenance  and  repairs  are  charged  to  expense as
incurred.  Renewals and improvements of a major nature are  capitalized.  At the
time of retirement or other disposition of property and equipment,  the cost and
accumulated  depreciation  are removed from the accounts and any resulting gains
or losses are reflected in operations.

Intangible Assets

         Intangible  assets include the cost of patents and trademarks,  and are
being amortized on the  straight-line  basis over their estimated  useful lives,
which vary from two to seventeen years.

Long-Lived Assets

         In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 144,  "Accounting for the Impairment or Disposal of Long-Lived  Assets," the
Company  evaluates  the  carrying  value of  long-lived  assets  for  impairment
whenever  events or change in  circumstances  indicate that such carrying values
may not be  recoverable.  Under SFAS No. 144, the Company  estimates  the future
undiscounted  cash  flows  derived  from an asset  to  assess  whether  or not a
potential  impairment exists when events or circumstances  indicate the carrying
value of a long-lived  asset may differ.  An impairment  loss is recognized when
the  undiscounted  future  cash  flows are less than its  carrying  amount.  The
Company uses its best judgment based on the most current facts and circumstances
surrounding its business when applying these  impairment  rules to determine the
timing of the  impairment  test,  the  undiscounted  cash  flows  used to assess
impairments  and the fair  value of a  potentially  impaired  asset.  Changes in
assumptions used could have a significant impact on the Company's  assessment of
recoverability.  At March 31, 2004,  the Company  determined  that no impairment
loss was  necessary.  There can be no  assurance,  however,  that demand for the
Company's products will continue, which could result in impairment of long-lived
assets in the future.

Deferred Financing Costs

         Deferred  financing  costs  represent costs incurred in connection with
the  issuance  of the  convertible  debentures.  Deferred  financing  costs  are
amortized  over  the life of the  convertible  debentures  on the  straight-line
basis, which approximates the effective interest method.

--------------------------------------------------------------------------------
Page F-5

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

Beneficial Conversion Feature

         The  convertible  feature of certain  convertible  notes provides for a
rate of  conversion  that is  below  market  value.  Such  feature  is  normally
characterized as a "beneficial conversion feature" ("BCF"). Pursuant to Emerging
Issues  Task  Force  ("EITF")  Issue  No.  98-5,   "Accounting  For  Convertible
Securities  with  Beneficial  Conversion  Features  or  Contingently  Adjustable
Conversion Ratio" and EITF Issue No. 00-27,  "Application of EITF Issue No. 98-5
To Certain Convertible  Instruments," the relative fair values of the BCF's have
been  recorded  as a  discount  to  the  face  amount  of  the  respective  debt
instrument.  The Company amortizes the discount using the straight-line  method,
which  approximates  the effective  interest  method,  through  maturity of such
instruments. The Company will record the corresponding unamortized debt discount
related  to the BCF and the  warrants  as  interest  expense  when  the  related
instrument is converted into the Company's common stock.

Fair Value of Financial Instruments

         The  Company's   financial   instruments   consist  of  cash,  accounts
receivable,   payables,   accrued   expenses,   notes  payable  and  convertible
debentures. The carrying value for all such instruments,  except the convertible
debentures,  considering the terms,  approximates  fair value at March 31, 2004.
The fair value of  convertible  debentures  is not  determinable  as  equivalent
instruments could not be located.

Revenue Recognition

         Revenue is  recognized  in accordance  with Staff  Accounting  Bulletin
("SAB") No. 101, "Revenue  Recognition in Financial  Statements",  as revised by
SAB 104. The Company  recognizes revenue when products are shipped to a customer
and the risks and rewards of ownership  and title have passed based on the terms
of sale. The Company records a provision for sales returns and claims based upon
historical experience. Actual returns and claims in any future period may differ
from the Company's estimates.

         Amounts billed to customers for shipping and handling fees are included
in net sales,  and freight costs incurred  related to these fees are included in
cost of goods sold in  accordance  with EITF Issue No.  00-01,  "Accounting  for
Shipping and Handling Fees and Costs."

         Licensing  revenue is  recognized  when earned per the terms of royalty
agreements. Occasionally, licensees pay royalties in advance, which are recorded
as deferred  licensing  revenue in the accompanying  consolidated  balance sheet
until such time they are earned.

Product Warranties

         The Company generally provides a lifetime warranty against defects. The
Company  maintains  a  reserve  for its  product  warranty  liability  based  on
estimates calculated using historical warranty experience.  While warranty costs
have  historically  been  within  the  Company's  expectations,  there can be no
assurance that the Company will continue to experience the same warranty  return
rates or repair  costs as in prior  years.  A  significant  increase  in product
return rates, or a significant  increase in the costs to repair  product,  could
have a material  adverse  impact on the Company's  operating  results.  Warranty
activity was not significant during the periods presented.

 Advertising

         Advertising  costs for the three  months  ended March 31, 2004 and 2003
were  $12,252  and  $50,866,  respectively,  which is  included  in selling  and
marketing  expenses in the  accompanying  condensed  consolidated  statements of
operations.

Basic and Diluted Loss Per Share

         Basic  earnings  (loss)  per  common  share are  computed  based on the
weighted average number of shares  outstanding for the period.  Diluted earnings
(loss) per share is  computed  by  dividing  net income  (loss) by the  weighted
average shares  outstanding  assuming all dilutive  potential  common shares are
issued.  Basic and  diluted  loss per  share is the same as the  effect of stock
options and warrants on loss per share are  anti-dilutive  and thus not included
in the  diluted  loss per  share  calculation.  However,  the  impact  under the
treasury  stock method of dilutive  stock  options and warrants  would have been
zero and 2,344,047  incremental shares for three months ended March 31, 2004 and
2003, respectively.

Reclassifications

         Certain prior period amounts have been  reclassified  to conform to the
current period presentation.

--------------------------------------------------------------------------------
Page F-6

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

Segment and Geographic Information

         The Company  operates in one  business  segment.  The Company  sells to
customers in the United  States and the Far East.  During the three months ended
March 31, 2004 and 2003 the Company had no international sales.

Stock-Based Compensation

         The Company  periodically  issues common stock options and common stock
purchase  warrants  to  employees  and  non-employees  in  non-capital   raising
transactions for services rendered and to be rendered, and as financing costs.

         Stock-based  awards to  non-employees  are accounted for using the fair
value  method in  accordance  with SFAS No.  123,  "Accounting  for  Stock-Based
Compensation," and EITF Issue No. 96-18, "Accounting for Equity Instruments that
are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling
Goods or  Services."  All  transactions  in  which  goods  or  services  are the
consideration  received for the issuance of equity instruments are accounted for
based on the fair value of the  consideration  received or the fair value of the
equity instrument issued, whichever is more reliably measurable. The measurement
date used to  determine  the fair value of the equity  instrument  issued is the
earlier of the date on which the third-party performance is complete or the date
on which it is probable that performance will occur.

         The Company  accounts for  stock-based  awards to  employees  using the
intrinsic  value method in  accordance  with APB Opinion No. 25. As permitted by
SFAS No. 123, as amended by SFAS No. 148,  the Company has chosen to continue to
account for its employee stock-based  compensation plan under APB Opinion No. 25
and provide the  expanded  disclosures  specified in SFAS No. 123, as amended by
SFAS No. 148. Had employee stock based  compensation  cost been determined using
the fair value method, the Company's net loss and loss per share would have been
adjusted to the pro forma amounts indicated below:

                                                    For the Three Months
                                                        Ended March 31,
                                                 ---------------------------
                                                      2004           2003
                                                 ------------    -----------
Net loss as reported                             $ (1,245,165)   $(1,147,916)

Deduct:  Total stock-based  employee
compensation under fair value based method
for all awards, net of related tax effects                 --        (37,417)
                                                 ------------    -----------
Pro forma net loss                               $ (1,245,165)   $(1,185,333)
                                                 ============    ===========
Basic and diluted loss per share - as reported   $      (0.03)   $     (0.03)
                                                 ============    ===========
Basic and diluted loss per share - pro forma     $      (0.03)   $     (0.03)
                                                 ============    ===========

Recently Issued Accounting Pronouncements

         In May 2003,  the FASB  issued SFAS No.  150,  "Accounting  for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150 establishes  standards for the classification and measurement of certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 also includes required disclosures for financial  instruments within its
scope. For the Company,  SFAS No. 150 was effective for instruments entered into
or modified  after May 31, 2003 and otherwise will be effective as of January 1,
2004,  except  for  mandatory  redeemable  financial  instruments.  For  certain
mandatory redeemable financial  instruments,  SFAS No. 150 will be effective for
the Company on January 1, 2005. The Company is in process of evaluating  whether
the  adoption of SFAS No. 150 will have a  significant  impact on the  Company's
overall results of operations or financial position.

--------------------------------------------------------------------------------
Page F-7

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

         In November 2004, the FASB issued SFAS No. 151,  "Inventory  Costs,  an
amendment of ARB No. 43, Chapter 4." The amendments made by SFAS No. 151 clarify
that abnormal amounts of facility expense,  freight,  handling costs, and wasted
materials (spoilage) should be recognized as current-period  charges and require
the allocation of fixed  production  overheads to inventory  based on the normal
capacity of the production  facilities.  The guidance is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. The Company is
in the process of  evaluating  whether the  adoption of SFAS No. 151 will have a
significant  impact on the Company's  overall results of operations or financial
position.

         In December  2004,  the FASB issued SFAS No. 123 (revised  2004) ("SFAS
No.  123(R)"),  "Share-Based  Payment," to provide  investors and other users of
financial  statements  with more complete and neutral  financial  information by
requiring  that  the   compensation   cost  relating  to   share-based   payment
transactions be recognized in financial  statements.  That cost will be measured
based on the fair value of the equity or liability instruments issued. Statement
No.  123(R)  covers  a  wide  range  of  share-based  compensation  arrangements
including share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans. SFAS No. 123(R) replaces
SFAS No. 123 and  supersedes  APB Opinion  No. 25.  SFAS No. 123, as  originally
issued  in  1995,  established  as  preferable  a  fair-value-based   method  of
accounting for share-based payment  transactions with employees.  However,  that
statement  permitted  entities the option of continuing to apply the guidance in
APB Opinion No. 25, as long as the footnotes to financial  statements  disclosed
what net income would have been had the preferable  fair-value-based method been
used.  The Company  will be  required to apply SFAS No.  123(R) as of January 1,
2006.  The Company is in the process of evaluating  whether the adoption of SFAS
No. 123(R) will have a significant  impact on the Company's  overall  results of
operations or financial position.

         In  December  2004,  the  FASB  issued  SFAS  No.  153,  "Exchanges  of
Non-monetary  Assets - an  amendment  of APB  Opinion  No.  29,  Accounting  for
Non-monetary  Transactions."  This  statement  amends  APB  Opinion  No.  29  to
eliminate the exceptions for non-monetary exchanges of similar productive assets
and replaces it with a general  exception for exchanges of  non-monetary  assets
that do not have commercial  substance.  A non-monetary  exchange has commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly  as a result of the exchange.  The provisions for SFAS No. 153 are
effective  for  non-monetary   asset  exchanges  incurred  during  fiscal  years
beginning  after June 15, 2005. The Company is currently  evaluating the effect,
if any, of adopting SFAS No. 153.

4.  BANK LINES OF CREDIT

         The  Company  had a  $250,000  bank  line  collateralized  by  eligible
accounts  receivable.  The line of credit originally matured on December 9, 2003
and was  extended  to June 2004.  Outstanding  borrowings  bore  interest at 28%
annually.  Interest was payable  monthly.  There were no outstanding  borrowings
under this line at March 31, 2004.  This credit line was closed and paid in full
in June 2004.  The Company  also had an  unsecured  $70,000  line of credit with
another bank.  Interest was payable monthly at a variable rate (10% at March 31,
2004).  Outstanding  borrowings  at March 31,  2004 were  $64,688.  This line of
credit was closed and paid in full in September 2004.  Interest  expense related
to the bank lines of credit was  $6,403  and $9,403 for the three  months  ended
March 31, 2004 and 2003, respectively.

5.  CONVERTIBLE DEBENTURES DUE TO RELATED PARTIES

         On October 7, 2003,  the Company  completed  the sale of $250,000 of 5%
convertible  debentures to MC Corporation,  a company  affiliated with a Company
director and stockholder  ("MC Corp").  These  debentures were  convertible into
common  stock at $0.09 per share for a period of three  months  from the date of
issuance.  For  each  share  of  common  stock  issued  upon  conversion  of the
debentures,  one  common  stock  purchase  warrant  will be  issued  and will be
exercisable  for a period of twelve months at $0.045 per share.  Issuance  costs
were not significant.  The estimated value of the beneficial  conversion feature
was not significant at the date of issuance. In December 2003, these debentures,
including  accrued  interest of $2,083,  were converted into 2,800,922 shares of
common stock. The warrants expired unexercised.

         On December 30, 2003,  the Company  completed the sale of $1,000,000 of
5%  convertible   debentures  to  Quincy  and  MC  Corp.  The  debentures   were
automatically convertible into 525,000 shares of Series A preferred stock of the
Company within ninety days of the date of issuance. Pursuant to the terms of the
debenture  agreement,  if the Company was unable to convert the debentures  into
shares  of  Series  A  preferred  stock  within  ninety  days of  issuance,  the
debentures  would  become  immediately  due and payable in full,  with  interest
continuing  to  accrue  at the face  rate of  interest  of 5% per  annum.  As of
December  31,  2003,  the Company  had not  received  $100,000 in proceeds  from
Quincy,  and accordingly,  the Company recorded $100,000 due from stockholder in
the  accompanying  consolidated  balance  sheet.  The  amount  was  subsequently
received in January 2004. The debentures are currently in default and are due on
demand.

--------------------------------------------------------------------------------
Page F-8

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

         Holders of the Series A  preferred  stock have the right to convert the
Series  A  preferred  stock  into  shares  of  common  stock of the  Company  at
conversion  rates of 158:1 for  Quincy  and  161:1 for MC Corp.  upon any of the
following:  (i)  eighteen  months  after the date of  issuance  of the  Series A
preferred stock,  (ii) a change of control,  as defined,  or (iii) upon the date
the Company is no longer  required to file reports or financial  statements with
the United States Securities Exchange Commission.

         The conversion  feature of the  convertible  debentures  provides for a
rate of  conversion  that is  below  market  value,  resulting  in a  beneficial
conversion  feature.  The  Company  estimated  the fair value of the  beneficial
conversion  feature to be  $1,000,000  at date of issuance,  and  recorded  such
conversion feature as a debt discount.  The Company recorded interest expense of
$977,778   during  the  three  months  ended  March  31,  2004  related  to  the
amortization of the debt discount.

6.  CONVERTIBLE DEBENTURES

         On June 6, 2002,  the Company  completed  the sale of  $2,100,000 of 7%
convertible  debentures.  The  debentures are  convertible  into common stock at
$0.25 per share for the  period of 12 months  commencing  six  months  after the
initial sale of the  debentures,  and were due in December  2003.  The Company's
patents, trademarks, and other intangible assets secure the debentures. For each
share of common stock issued upon conversion of the debentures, one common stock
purchase  warrant will be issued,  which will be  exercisable at $0.10 per share
for a period of 18 months from the date of conversion.

         The conversion  feature of the  convertible  debentures  provides for a
rate of  conversion  that is  below  market  value,  resulting  in a  beneficial
conversion  feature.  The  Company  estimated  the fair value of the  beneficial
conversion  feature to be  $2,100,000  at date of issuance,  and  recorded  such
conversion  feature as a debt discount,  which was amortized to interest expense
over the term of the  debentures.  On December 16, 2002, the Company's  Board of
Directors approved a modification to the original debenture agreement to provide
for the exercise of warrants  prior to the  conversion  of the  debentures.  The
Company estimated the fair value of the warrants at the date of the modification
and  reallocated  $600,000 of the original  debt  discount of  $2,100,000 to the
warrants  based on the  relative  fair  values of the  warrants  and  beneficial
conversion  feature as of December 16,  2002.  The  estimated  fair value of the
warrants was amortized over the remaining term of the debentures.

         In connection with the issuance of the  debentures,  the Company issued
420,000 shares of the Company's  common stock valued at $105,000 to Wyngate as a
finder's  fee. In addition,  the Company  granted  Wyngate a warrant to purchase
420,000  shares of the Company's  common stock at an exercise price of $0.10 per
share, which were exercisable for a period of eighteen months. The warrants were
valued at $172,200 using the  Black-Scholes  option-pricing  model. In addition,
the Company  issued  540,000  shares of the  Company's  common  stock  valued at
$135,000 as a finder's  fee to an unrelated  third party.  The Company also paid
legal fees of $29,934 related to the financing.

         The costs incurred in connection with the financing were capitalized as
deferred  financing  costs  and  amortized  over  the  term  of the  convertible
debentures.  Amortization  of deferred  financing  costs was $86,009  during the
three  months  ended March 31,  2003 and is included in interest  expense in the
accompanying consolidated statements of operations.

         In January and February 2004, the Company repaid an additional $200,000
in   debentures,   including   accrued   interest,   which  was  satisfied  with
approximately  $122,000  cash and  inventories  valued at $100,000.  The Company
continues to accrue interest on all  outstanding  debentures at the face rate of
interest.

         Interest expense related to the convertible  debentures was $24,970 and
$682,040 for the three months ended March 31, 2004 and 2003,  respectively.  For
the three months ended March 31, 2003,  $643,565  related to the amortization of
debt discount. Accrued interest at March 31, 2004 was $169,062.

7.  STOCKHOLDERS' EQUITY

         During the three  months  ended  March 31,  2003,  the  Company  issued
2,800,000  shares of common  stock for  exercised  warrants  at $0.10 per share.
During the three months ended March 31, 2003,  the Company  issued 25,000 shares
of common stock for exercised options at $0.01 per share.

         During the three  months ended March 31,  2004,  the Company  issued no
equity instruments.

--------------------------------------------------------------------------------
Page F-9

<PAGE>
                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

8.  COMMITMENTS AND CONTINGENCIES

Litigation

         On December 18, 2003,  the Company  received a resignation  letter from
Donald A.  Anderson as a member of the Board of  Directors  of the  Company.  On
December 19, 2003, Mr. Anderson also resigned as Chief Executive  Officer of the
Company.  Prior to his  resignation,  on or about November 8, 2003, Mr. Anderson
was  suspended  pending  an  investigation  into  possible   violations  of  his
employment contract with the Company and breach of fiduciary duty.

         On November  18,  2003,  Mr.  Anderson  filed a  complaint  against the
Company and its officers for breach of written contract, wrongful termination of
employment  and  slander.  Subsequently,  the  Company  filed a cross  complaint
against Mr.  Anderson  for,  among other  things,  breach of fiduciary  duty and
breach of written contract.

         On June 23, 2004, the Company,  its officers and Mr.  Anderson  entered
into a Settlement Agreement (the "Settlement  Agreement"),  wherein, among other
things,  the Company  withdrew its  allegation  that Mr.  Anderson  breached his
fiduciary duties. Pursuant to the terms of the Settlement Agreement, the Company
agreed to (i) pay Mr. Anderson $165,000 in varying  installments through January
30,  2006,  (ii)  transfer  the title of a 1996 Ford custom tour van (with a net
book value of approximately  $7,000) owned by the Company to Mr.  Anderson,  and
remove Mr.  Anderson as a guarantor from certain  Company debt  obligations.  In
return,  Mr.  Anderson  returned to the Company  994,110 shares of the Company's
common stock owned by him valued at approximately  $30,000 (fair market value of
the  Company's  stock on the  settlement  date).  As of December 31,  2003,  the
Company  recorded  a net  liability  of  approximately  $142,000  related to the
settlement  of this  lawsuit.  Mr.  Anderson  also agreed to convert  $60,000 in
debentures, including accrued interest, held by him into shares of the Company's
common stock at a conversion  rate of $0.095 per share.  These  debentures  were
converted  into  753,000  shares of the  Company's  common stock on February 23,
2005.

         The Company is  currently  in default for payment of amounts due to Mr.
Anderson under the  Settlement  Agreement.  On February 15, 2005,  Mr.  Anderson
received a judgment  for  $76,310  due to him under the terms of the  Settlement
Agreement.  Pursuant to the Settlement Agreement,  the Company agreed to issue a
new  stock  certificate  to Mr.  Anderson  for a stolen  stock  certificate  for
2,642,625  shares of the Company's common stock. As of July 8, 2005, the Company
has not issued this stock  certificate.  Mr.  Anderson  will dismiss the lawsuit
upon the Company's full performance of the Settlement Agreement.

         In March  2004,  holders in the  amount of  $200,000  of the  Company's
convertible  debentures  filed suit  against the Company  claiming,  among other
things,  breach of written  contract and default  under  security  agreement and
possession of collateral.  The plaintiffs are seeking repayment of the principal
amount of the debentures,  including accrued interest,  which matured on January
6, 2004,  and possession of the  intellectual  property,  including  patents and
trademarks,  which  collateralized  the  debentures.  The parties are  currently
attempting to reach agreement on resolving this action in its entirety.

         From  time  to time  the  Company  is  involved  in  various  types  of
litigation  in the  normal  course  of  business,  none of which  is  considered
material at this time.

Indemnities and Guaranties

         The  Company  has  executed   certain   contractual   indemnities   and
guarantees,  under which it may be required to make  payments to a guaranteed or
indemnified  party.  The Company  also has agreed to  indemnify  its  directors,
officers, employees and agents to the maximum extent permitted under the laws of
the State of Nevada.  In connection with a certain  facility lease,  the Company
has  indemnified  its  lessor for  certain  claims  arising  from the use of the
facilities.  The duration of the guarantees and indemnities  varies, and in many
cases is indefinite.  These  guarantees  and  indemnities do not provide for any
limitation  of the  maximum  potential  future  payments  the  Company  could be
obligated to make. Historically,  the Company has not been obligated to make any
payments for these  obligations and no liabilities  have been recorded for these
indemnities and guarantees in the accompanying consolidated balance sheet.

9.  RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

         During the year ended  December 31, 2003, the Company  determined  that
the manner in which it accounted  for the  beneficial  conversion  option on the
sale of its $2,100,000 of  convertible  debentures in 2002 was not in accordance
with Emerging Issues Task Force Issue No. 00-27,  "Application of Issue No. 98-5
to  Certain  Convertible  Instruments,"  which  states  that the  debt  discount
resulting from recording a beneficial  conversion option should be accreted from

--------------------------------------------------------------------------------
Page F-10

<PAGE>

                     GOLFGEAR INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 2004 AND 2003

the  date  of  issuance  to  the  stated  redemption  date  of  the  convertible
instrument, regardless of when the earliest conversion date occurs. Accordingly,
in connection with the restatement  adjustments,  the Company has  appropriately
reflected the amortization of the debt discount  resulting from the recording of
the beneficial  conversion  option over the term of the convertible  debentures.
The Company had previously  recorded the  amortization of the debt discount over
the earliest period that the convertible debentures could be converted.

         During the year ended  December 31, 2003,  the Company also  determined
that certain  transactions  involving  the issuance of its common stock were not
recorded  appropriately in 2002. During 2002, the Company acquired the operating
assets of  Lazereyes  and issued  150,000  shares of its common  stock valued at
$42,000  as  purchase   consideration.   In  connection   with  the  restatement
adjustments,  the Company has reflected the value of the purchase  consideration
at  $42,000  and  amortized  the  additional  purchase  consideration  that  was
allocated  to acquired  intangibles.  The Company had  previously  recorded  the
purchase  consideration as 100,000 shares of its common stock valued at $28,000.
In addition,  during 2002 the Company  issued 960,000 shares of its common stock
valued at $240,000 and warrants  valued at $172,200 as deferred  financing costs
in connection with the $2,100,000  convertible debenture financing.  The Company
had previously  recorded 1,072,000 shares of its common stock valued at $268,000
and warrants valued at $218,120 as deferred  financing  costs.  Accordingly,  in
connection  with the  restatement  adjustments,  the Company has  reflected  the
appropriate  number of shares issued and the associated value, and amortized the
adjusted amount over the term of the convertible debentures.

         The  following   table  presents  a  summary  of  the  effects  of  the
restatement  adjustments on the Company's  consolidated  statement of operations
for the three months ended March 31, 2003:

Consolidated statement of operations:

                              As previously
                                 Reported      Adjustments    As Restated
                                -----------    -----------    -----------
Interest expense                $   133,365    $   643,565    $   776,930
Depreciation and amortization        19,507          1,750         21,257
Net loss                           (502,601)      (645,315)    (1,147,916)
Loss per common share -
   basic and diluted            $     (0.01)   $     (0.02)   $     (0.03)

10.  SUBSEQUENT EVENTS

         During  the  third  quarter  of  2004  the  Company   suspended  normal
operations,  including  expanding  brands and product  offerings,  new marketing
programs, and direct marketing to customers,  due to a lack of operating working
capital resources.  To the extent that the Company is unable to secure financing
in 2005, the Company's  liquidity and ability to continue to conduct  operations
will be impaired (see below about future financing).

         From July 2004  through  June 2005,  a  director  and  stockholder  has
advanced  approximately  $300,000 to the Company to be used for working capital.
The Company has received these funds and recorded them as loans from stockholder
of $185,600 during 2004 and $114,400 during 2005.

         On January 14, 2005, the Company secured a commitment for a $10,000,000
private placement  offering whereby a third party investor (the "Investor") will
purchase up to  $10,000,000  of the  Company's  common stock over a  twenty-four
month period to provide the Company with operating  capital.  Funding is subject
to, among other things,  the Company  filing a  registration  statement with the
U.S.  Securities  and Exchange  Commission  with respect to the resale of common
stock sold in the private placement  offering.  The Company is currently working
towards  satisfying all conditions  precedent to closing the funding,  but there
can be no assurance  that the Company will be  successful  in  satisfying  these
terms. In connection with the funding commitment, the Company paid a structuring
fee of $10,000 and issued  2,000,000 shares of the Company's common stock to the
Investor as a commitment fee.

         On February  23,  2005,  a debenture  for  $60,000,  including  accrued
interest, was converted to 753,000 shares of the Company's common stock.

--------------------------------------------------------------------------------
Page F-11

<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

         The  following  discussion  should  be read  in  conjunction  with  the
condensed unaudited  consolidated  financial statements and notes thereto of the
Company appearing elsewhere in this report. Such financial  statements have been
prepared  to reflect the  Company's  financial  position  as of March 31,  2004,
together  with the results of  operations  for the three  months ended March 31,
2004 and 2003,  and cash flows for the three  months  ended  March 31,  2004 and
2003.

FORWARD-LOOKING STATEMENTS

         Historical  results  and trends  should not be taken as  indicative  of
future operations. Management's statements contained in this report that are not
historical facts are  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act".) Actual results may differ
materially from those included in the  forward-looking  statements.  The Company
intends  such  forward-looking  statements  to be  covered  by  the  safe-harbor
provisions for  forward-looking  statements  contained in the Private Securities
Litigation  Reform Act of 1995,  and is including this statement for purposes of
complying with those safe-harbor provisions.  Forward-looking statements,  which
are based on certain  assumptions  and describe  future  plans,  strategies  and
expectations  of the Company,  are  generally  identifiable  by use of the words
"believe," "expect," "intend," "anticipate," "estimate," "project," "prospects,"
or similar  expressions.  The Company's ability to predict results or the actual
effect of future plans or  strategies  is  inherently  uncertain.  Factors which
could have a material  adverse affect on the operations and future  prospects of
the Company on a consolidated basis include,  but are not limited to: changes in
economic  conditions  generally  in the United  States of America  and the other
countries in which the Company  operates,  legislative/regulatory  changes,  the
political climate in the foreign  countries in which the Company  operates,  the
availability of capital, interest rates, competition,  and accounting principles
generally  accepted in the United  States of America  ("GAAP").  These risks and
uncertainties should be considered in evaluating  forward-looking statements and
undue  reliance  should not be placed on such  statements.  Further  information
concerning the Company and its business, including additional factors that could
materially affect the Company's financial results, is included herein and in the
Company's other filings with the Securities and Exchange Commission.

OVERVIEW

         The  Company  designs,  develops  and  markets  premium  golf clubs and
related golf products.  The Company utilizes its proprietary  forged face insert
technology  to  offer a full  line  of  golf  equipment.  The  Company's  patent
portfolio   with  respect  to  insert   technology   is  the  largest  and  most
comprehensive  in the golf  industry,  with nine  domestic  and foreign  patents
issued  related to forged face insert  technology.  These patents  incorporate a
wide  variety of forged face insert  materials,  including  titanium,  beryllium
copper, stainless steel, carbon steel, aluminum, and related alloys thereof, and
include  technology  relating to varying the face  thickness of the insert.  The
Company operates in one business segment.  The Company sells to customers in the
United States and the Far East.

         The  consolidated  financial  statements  include  the  accounts of the
Company and its wholly owned  subsidiaries,  GGI,  Inc.,  GearFit Golf  Company,
Pacific  Golf  Holdings,  Inc.,  Bel Air Players  Group,  Inc.  and Leading Edge
Acquisition,   Inc.  All  intercompany   transactions  and  balances  have  been
eliminated in consolidation.

         During  the  third  quarter  of  2004,  the  Company  suspended  normal
operations,  including  expanding  brands and product  offerings,  new marketing
programs, and direct marketing to customers,  due to a lack of operating working
capital resources.  To the extent that the Company is unable to secure financing
in 2005, the Company's  liquidity and ability to continue to conduct  operations
will be impaired.

Restatement of Previously Issued Financial Statements

         During the year ended  December 31, 2003, the Company  determined  that
the manner in which it accounted  for the  beneficial  conversion  option on the
sale of its $2,100,000 of  convertible  debentures in 2002 was not in accordance
with Emerging Issues Task Force Issue No. 00-27,  "Application of Issue No. 98-5
to  Certain  Convertible  Instruments,"  which  states  that the  debt  discount
resulting from recording a beneficial  conversion option should be accreted from
the  date  of  issuance  to  the  stated  redemption  date  of  the  convertible
instrument, regardless of when the earliest conversion date occurs. Accordingly,
in connection with the restatement  adjustments,  the Company has  appropriately
reflected the amortization of the debt discount  resulting from the recording of
the beneficial  conversion  option over the term of the convertible  debentures.
The Company had previously  recorded the  amortization of the debt discount over
the earliest period that the convertible debentures could be converted.

         During the year ended  December 31, 2003,  the Company also  determined
that certain  transactions  involving  the issuance of its common stock were not
recorded  appropriately in 2002. During 2002, the Company acquired the operating

--------------------------------------------------------------------------------
Page 1

<PAGE>

assets of  Lazereyes  and issued  150,000  shares of its common  stock valued at
$42,000  as  purchase   consideration.   In  connection   with  the  restatement
adjustments,  the Company has reflected the value of the purchase  consideration
at  $42,000  and  amortized  the  additional  purchase  consideration  that  was
allocated  to acquired  intangibles.  The Company had  previously  recorded  the
purchase  consideration as 100,000 shares of its common stock valued at $28,000.
In addition,  during 2002 the Company  issued 960,000 shares of its common stock
valued at $240,000 and warrants  valued at $172,200 as deferred  financing costs
in connection with the $2,100,000  convertible debenture financing.  The Company
had previously  recorded 1,072,000 shares of its common stock valued at $268,000
and warrants valued at $218,120 as deferred  financing  costs.  Accordingly,  in
connection  with the  restatement  adjustments,  the Company has  reflected  the
appropriate  number of shares issued and the associated value, and amortized the
adjusted amount over the term of the convertible debentures.

         See  Note  9  to  the  accompanying  condensed  consolidated  financial
statements included in this Quarterly Report on Form 10-QSB for a summary of the
effects of the restatement  adjustments on the Company's  consolidated statement
of  operations  for the three  months  ended  March 31,  2003.  The  information
provided in the accompanying  Management's  Discussion and Analysis of Financial
Condition  and  Results of  Operations  reflects  the effect of the  restatement
adjustments.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2004 AND 2003

         Net sales  decreased  to  $371,557  in 2004 from  $545,245  in 2003,  a
decrease of $173,688 or 31.9%.  The decrease in net sales in 2004 as compared to
2003 is a result of the Company's lack of inventory and marketing  efforts.  The
Company lacked the financial resources necessary to acquire inventory or sustain
marketing efforts.

         Gross profit  decreased to $194,703 in 2004 from $216,907 in 2003,  and
increased as a percentage of net sales to 52.4% in 2004 from 39.8% in 2003.  The
increase  in  gross  profit  as a  percentage  in  2004  is due  to the  Company
negotiating better pricing from its suppliers.

         Selling and marketing  expenses  decreased to $87,168 in 2004 (23.5% of
net sales) from  $189,951 in 2003 (34.8% of net sales),  a decrease of $102,783.
In 2004,  the  Company  lacked  the  financial  resources  necessary  to acquire
inventory or sustain marketing efforts.

         Tour and pro  contract  expenses  decreased to $20,388 in 2004 (5.5% of
net sales) from $21,234 in 2003 (3.9% of net sales), a decrease of $846.

         General  and  administrative  expenses  decreased  to  $298,447 in 2004
 (80.3% of net sales) from $400,041 in 2003 (73.4% of net sales),  a decrease of
 $103,994.   In  2004,  the  Company's  limited   resources   required  reducing
 non-essential expenses, including reduction in personnel.

         Depreciation and amortization  decreased to $7,562 in 2004 from $21,257
in 2003,  a decrease  of  $13,695.  The  decrease  is a result of the  Company's
down-sizing and disposal of certain non-essential assets.

         Interest expense increased to $1,018,764 in 2004 from $776,930 in 2003.
The increase in interest  expense was  primarily due to the increase in interest
expense related to the $1,000,000  convertible  debenture financing which closed
in December 2003. The conversion feature of the convertible  debentures provides
for a rate of conversion  that is below market value,  resulting in a beneficial
conversion  feature.  The  Company  estimated  the fair value of the  beneficial
conversion  feature to be  $1,000,000  at date of issuance,  and  recorded  such
conversion  feature as a debt discount,  which was amortized to interest expense
over the term of the  debentures.  The  Company  recorded  interest  expense  of
$977,778   during  the  three  months  ended  March  31,  2004  related  to  the
amortization of the debt discount.

         Net  loss  was  $1,245,165  for  2004  as  compared  to a net  loss  of
$1,147,916  for 2003.  The increase in the net loss is primarily  related to the
increase in non-cash interest expense noted above.

Liquidity and Capital Resources

         The  consolidated  financial  statements as of and for the three months
ended March 31, 2004 have been prepared  assuming that the Company will continue
as a going  concern,  which  contemplates  the  realization  of  assets  and the
satisfaction  of  liabilities  in the normal  course of  business.  The carrying
amounts  of assets  and  liabilities  presented  in the  consolidated  financial
statements do not purport to represent the realizable or settlement  values. The
Company  has  suffered  recurring   operating  losses  and  requires  additional
financing to continue operations. For the three months ended March 31, 2004, the
Company  incurred  a  loss  from  operations  of  $218,862  and  a net  loss  of
$1,245,165;  cash used in operating  activities of $6,238; and a working capital
deficit of $3,470,445 with a stockholders' deficit of $3,364,310. As a result of
these  factors,  among others,  there is  substantial  doubt about the Company's
ability to continue as a going concern.

--------------------------------------------------------------------------------
Page 2

<PAGE>

         The  Company  will  require   additional   capital  to  fund  operating
requirements.  The  Company  is  exploring  various  alternatives  to raise this
required capital,  including convertible debentures,  private infusion of equity
and various collateralized debt instruments, but there can be no assurances that
the Company will be successful in this regard. To the extent that the Company is
unable to secure the capital necessary to fund its future cash requirements on a
timely basis and/or under acceptable terms and conditions,  the Company may have
to substantially  reduce its operations to a level consistent with its available
working capital resources. The Company may also be required to consider a formal
or informal restructuring or reorganization.

         The Company has financed its working  capital  requirements  during the
past few years principally from the private placement of securities.  Such funds
have  periodically  been  supplemented  with  short-term  borrowings  under  the
Company's  bank line of credit and other private  sources.  The  Company's  bank
lines of credit  were paid in full and closed in 2004.  The  Company is actively
seeking an investment of additional capital. If adequate funds are not available
on acceptable terms, the Company may be unable to continue operations,  develop,
enhance and market  products,  retain  qualified  personnel,  take  advantage of
future opportunities,  or respond to competitive  pressures,  any of which could
have a material  adverse effect on the Company's  business,  operating  results,
financial condition or liquidity (see financing  activities below for additional
information on future funding).

Operating Activities

         The  Company's  operations  used cash of $6,238 during the three months
ended  March 31,  2004,  as compared to  utilizing  cash of $433,979  during the
corresponding  period for 2003.  The  decrease  in cash  utilized  in  operating
activities  in 2004 as compared to 2003 was  primarily a result of higher  gross
margins,  increased  accounts  payable,  collection of accounts  receivable  and
utilization of prepaid expenses. At March 31, 2004, cash was $3,316 representing
a decrease of $57,023,  as compared to $60,339 at December 31, 2003. The Company
had a working  capital deficit of $3,470,445 at March 31, 2004, as compared to a
working capital deficit of $2,243,712 at December 31, 2003.

Investing Activities

         During the three months ended March 31, 2004 and 2003, net cash used in
investing activities was $6,250 and $6,251, respectively.

Financing Activities

         During the three months ended March 31, 2004,  the Company  reduced its
borrowings  under bank lines of credit by $44,535 and  reduced  its  outstanding
convertible debt by $200,000.  During the three months ended March 31, 2003, the
Company  increased  its  borrowing on lines of credit by $93,627 and received an
aggregate of $280,250 from the issuance of common stock.

         Funds from these  transactions  have been used for working capital.  We
believe  that our cash flow from  operations,  our March 31, 2004 cash  balance,
additional capital raised and the borrowing capacity available under the line of
credit,  will not be  sufficient  to meet our  projected  capital  expenditures,
working capital and other cash  requirements  for the near future.  In order for
the Company to continue  its growth  plan,  additional  funding will be required
from outside sources.

         From January 2004  through  June 2005, a director and  stockholder  has
advanced  approximately  $340,000 to the Company to be used for working capital.
The Company has received these funds and recorded them as loans from stockholder
of $185,600 during 2004 and $154,400 during 2005.

         During  the  third  quarter  of  2004  the  Company   suspended  normal
operations,  including  expanding  brands and product  offerings,  new marketing
programs, and direct marketing to customers,  due to a lack of operating working
capital resources.  To the extent that the Company is unable to secure financing
in 2005, the Company's  liquidity and ability to continue to conduct  operations
will be impaired.

         On January 14, 2005, the Company secured a commitment for a $10,000,000
private placement  offering whereby a third party investor (the "Investor") will
purchase up to  $10,000,000  of the  Company's  common stock over a  twenty-four
month period to provide the Company with operating  capital.  Funding is subject
to, among other things,  the Company  filing a  registration  statement with the
U.S.  Securities  and Exchange  Commission  with respect to the resale of common
stock sold in the private placement  offering.  The Company is currently working
towards  satisfying all conditions  precedent to closing the funding,  but there
can be no assurance  that the Company will be  successful  in  satisfying  these
terms. In connection with the funding commitment, the Company paid a structuring
fee of $10,000 and issued  2,000,000 shares of the Company's common stock to the
Investor as a commitment fee.

Off Balance Sheet Arrangements

         As  of  March  31,  2004,   the  Company  has  no  off  balance   sheet
arrangements.

--------------------------------------------------------------------------------
Page 3
<PAGE>

Inflation

         We do not  believe  that  inflation  has had a  material  effect on our
business,  financial  condition or results of  operations.  If our costs were to
become  subject to  significant  inflationary  pressures,  we may not be able to
fully offset such higher costs through price increases. Our inability or failure
to do so could adversely affect our business, financial condition and results of
operations.

New Accounting Pronouncements

         In May 2003,  the FASB  issued SFAS No.  150,  "Accounting  for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150 establishes  standards for the classification and measurement of certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 also includes required disclosures for financial  instruments within its
scope. For the Company,  SFAS No. 150 was effective for instruments entered into
or modified  after May 31, 2003 and otherwise will be effective as of January 1,
2004,  except  for  mandatory  redeemable  financial  instruments.  For  certain
mandatory redeemable financial  instruments,  SFAS No. 150 will be effective for
the  Company  on  January  1,  2005.  The  Company  currently  does not have any
financial instruments that are within the scope of SFAS No. 150.

         In November 2004, the FASB issued SFAS No. 151,  "Inventory  Costs,  an
amendment of ARB No. 43, Chapter 4." The amendments made by SFAS No. 151 clarify
that abnormal amounts of facility expense,  freight,  handling costs, and wasted
materials (spoilage) should be recognized as current-period  charges and require
the allocation of fixed  production  overheads to inventory  based on the normal
capacity of the production  facilities.  The guidance is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. The Company is
in the process of  evaluating  whether the  adoption of SFAS No. 151 will have a
significant  impact on the Company's  overall results of operations or financial
position.

         In  December  2004,  the FASB  issued  SFAS  No.  123  (revised  2004),
"Share-Based  Payment,"  to  provide  investors  and  other  users of  financial
statements  with more complete and neutral  financial  information  by requiring
that the  compensation  cost relating to  share-based  payment  transactions  be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. Statement No. 123(R) covers
a wide range of share-based  compensation  arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee  share  purchase  plans.  SFAS No.  123(R)  replaces  SFAS No.  123 and
supersedes  APB Opinion No. 25.  SFAS No.  123,  as  originally  issued in 1995,
established   as  preferable  a   fair-value-based   method  of  accounting  for
share-based  payment  transactions  with  employees.   However,  that  statement
permitted entities the option of continuing to apply the guidance in APB Opinion
No. 25, as long as the  footnotes to  financial  statements  disclosed  what net
income  would have been had the  preferable  fair-value-based  method been used.
Public  entities  (other than those filing as small  business  issuers)  will be
required to apply SFAS No.  123(R) as of the first  interim or annual  reporting
period  that  begins  after June 15,  2005.  The  Company  is in the  process of
evaluating  whether  the  adoption of SFAS No.  123(R)  will have a  significant
impact on the Company's overall results of operations or financial position.

         In  December  2004,  the  FASB  issued  SFAS  No.  153,  "Exchanges  of
Non-monetary  Assets - an  amendment  of APB  Opinion  No.  29,  Accounting  for
Non-monetary  Transactions."  This  statement  amends  APB  Opinion  No.  29  to
eliminate the exceptions for non-monetary exchanges of similar productive assets
and replaces it with a general  exception for exchanges of  non-monetary  assets
that do not have commercial  substance.  A non-monetary  exchange has commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly  as a result of the exchange.  The provisions for SFAS No. 153 are
effective  for  non-monetary   asset  exchanges  incurred  during  fiscal  years
beginning  after June 15, 2005. The Company is currently  evaluating the effect,
if any, of adopting SFAS No. 153.

Critical Accounting Policies

Inventories

         Inventories  are stated at the lower of cost  (first-in,  first-out) or
estimated  market,  and consist of raw  materials,  work in process and finished
goods.  Market is determined  by  comparison  with recent sales or estimated net
realizable value.

--------------------------------------------------------------------------------
Page 4
<PAGE>

         Net realizable  value is based on  management's  forecasts for sales of
the Company's  products and services in the ensuing  years and/or  consideration
and analysis of changes in the customer base,  product mix, or other issues that
may  impact  the  estimated  net  realizable  value.  Should  the demand for the
Company's  products or services prove to be significantly less than anticipated,
the  ultimate   realizable   value  of  the  Company's   inventories   could  be
substantially  less than reflected in the  accompanying  condensed  consolidated
balance sheet.

Long-Lived Assets

         In July 2001,  the Financial  Accounting  Standards  Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of."  SFAS  No.  144  addresses  financial  accounting  and  reporting  for  the
impairment  or  disposal  of  long-lived  assets.  SFAS No.  144  requires  that
long-lived  assets be  reviewed  for  impairment  whenever  events or changes in
circumstances indicate that their carrying amount may not be recoverable. If the
cost  basis  of  a  long-lived  asset  is  greater  than  the  projected  future
undiscounted  net cash flows from such asset,  an impairment loss is recognized.
Impairment losses are calculated as the difference  between the cost basis of an
asset and its estimated fair value.

         As of March 31, 2004, management has determined that no such impairment
exists and therefore,  no adjustments  have been made to the carrying  values of
long-lived assets.  There can be no assurance,  however,  that market conditions
will not change or demand for the Company's  services and products will continue
which could result in impairment of long-lived assets in the future.

Intangible Assets

         SFAS  No.  142,  "Goodwill  and  Other  Intangible  Assets",  which  is
effective  for fiscal years  beginning  after  December 15, 2001,  addresses how
intangible assets that are acquired individually or with a group of other assets
should  be  accounted  for upon  their  acquisition  and  after  they  have been
initially  recognized  in the financial  statements.  SFAS No. 142 requires that
goodwill  and  intangible  assets  that  have  indefinite  useful  lives  not be
amortized, but rather be tested at least annually for impairment, and intangible
assets that have finite useful lives be amortized  over their  estimated  useful
lives.  SFAS No.  142  provides  specific  guidance  for  testing  goodwill  and
identifiable  intangible  assets that will not be amortized for  impairment.  In
addition,  SFAS No. 142 expands the disclosure  requirements  about goodwill and
other  intangible  assets  in the years  subsequent  to their  acquisition.  The
principal  effect of SFAS No.  142 on the  Company's  accompanying  consolidated
financial   statements  is  that  the  goodwill  described  in  Note  4  to  the
accompanying  condensed  consolidated financial statements is not required to be
amortized.

Revenue Recognition

         The Company  recognizes revenue when products are shipped to a customer
and the risks and rewards of ownership  and title have passed based on the terms
of sale. The Company records a provision for sales returns and claims based upon
historical experience. Actual returns and claims in any future period may differ
from the Company's estimates.

         Amounts billed to customers for shipping and handling fees are included
in net sales,  and freight costs incurred  related to these fees are included in
cost of goods sold in accordance  with Emerging Issues Task Force ("EITF") Issue
No. 00-01, "Accounting for Shipping and Handling Fees and Costs."

         Licensing  revenue is  recognized  when earned per the terms of royalty
agreements. Occasionally, licensees pay royalties in advance, which are recorded
as deferred  licensing revenue in the accompanying  consolidated  balance sheets
until such time they are earned.

Advertising

         The Company  expenses  advertising  costs as incurred,  except  certain
direct-response   advertising  costs.   Direct-response  advertising  costs  are
capitalized as incurred and then expensed when the related  advertising  program
is aired.

--------------------------------------------------------------------------------
Page 5

<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

         (a)  Evaluation  of  Disclosure  Controls and  Procedures.  The Company
carried out an evaluation,  under the supervision and with the  participation of
the  Company's  management,  including  the Company's  Chief  Executive  Officer
("CEO")  and  Chief  Financial  Officer  ("CFO"),  of the  effectiveness  of the
Company's  disclosure controls and procedures.  Based upon that evaluation,  the
CEO and CFO concluded that as of March 31, 2004 our  disclosure  controls and
procedures are of limited  effectiveness at the reasonable  assurance level such
that the  information  relating to the Company,  required to be disclosed in SEC
reports (i) is recorded,  processed,  summarized  and  reported  within the time
periods  specified  in  SEC  rules  and  forms,  and  (ii)  is  accumulated  and
communicated  to the  Company's  management,  including  our  CEO  and  CFO,  as
appropriate to allow timely decisions regarding required disclosure.

         (b) Changes in internal  control over  financial  reporting.  There has
been no change in the Company's  internal control over financial  reporting that
occurred  during the fiscal  quarter ended March 31, 2004 that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

Limitations on the Effectiveness of Internal Controls

         The  Company's  management,  including the CEO and CFO, does not expect
that our  disclosure  controls  and  procedures  or our  internal  control  over
financial  reporting will  necessarily  prevent all fraud and material error. An
internal control system, no matter how well conceived and operated,  can provide
only  reasonable,  not absolute,  assurance  that the  objectives of the control
system are met.  Further,  the design of a control  system must reflect the fact
that there are  resource  constraints,  and the  benefits  of  controls  must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues and instances of fraud,  if any, within the Company have been
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty,  and that breakdowns can occur because of simple
error or mistake.  Additionally,  controls can be circumvented by the individual
acts of some  persons,  by  collusion of two or more  people,  or by  management
override of the internal  control.  The design of any system of controls also is
based in part upon certain  assumptions  about the  likelihood of future events,
and there can be no  assurance  that any design will  succeed in  achieving  its
stated  goals under all  potential  future  conditions.  Over time,  control may
become  inadequate  because  of  changes  in  conditions,  and/or  the degree of
compliance with the policies or procedures may deteriorate.

--------------------------------------------------------------------------------
Page 6

<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         From time to time,  the  Company  may be  involved  in various  claims,
lawsuits,  disputes with third  parties,  and actions  involving  allegations or
discrimination or breach of contract actions incidental to the normal operations
of the business.  The Company is not currently  involved in any litigation which
management  believes  could  have a  material  adverse  effect on its  financial
position or results of operations.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS

Exhibit No.           Description
-----------           ----------------------
Exhibit 31*           Certification of Chief Executive Officer pursuant to
                      Exchange Act Rule 13a-14(a) or 15d-14(a).

Exhibit 32*           Certification of Chief Executive  Officer pursuant to 18
                      U.S.C.  Section 1350, as adopted pursuant to Section 906
                      of the Sarbanes-Oxley Act of 2002.

--------------------------------------------------------------------------------
* Filed herewith

--------------------------------------------------------------------------------
Page 7

<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.

                          GOLFGEAR INTERNATIONAL, INC.
                          ----------------------------
                                  (Registrant)

Date:  July 18, 2005      /s/ Daniel C. Wright
                          -------------------------
                          Daniel C. Wright
                          President, Chief Executive Officer
                           and Chief Financial Officer


<PAGE>

                                  EXHIBIT INDEX

Exhibit 31        Certification of Chief Executive Officer pursuant to Exchange
                  Act Rule 13a-14(a) or 15d-14(a).

Exhibit 32        Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.