SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

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

                        Commission file number: 333-61533

                     PROFORMANCE RESEARCH ORGANIZATION, INC.
                 (Name of small business issuer in its charter)

              DELAWARE                                      84-1334921
   (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                     Identification No.)

                  5335 WEST 48TH AVENUE, DENVER, COLORADO 80212
           (Address of principal executive offices including zip code)

          Issuer's telephone number, including area code: (303)458-1000

       Securities registered under Section 12(b) of the Exchange Act: NONE

       Securities registered under Section 12(g) of the Exchange Act: NONE

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 the filing requirements for the past 90 days. Yes ___ No _X_

Check if 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]

           Issuer's revenues for its most recent fiscal year. $189,740

    Aggregate market value of the voting stock held by non-affiliates of the
                registrant as of June 15, 1999: N/A (See Item 5)

    Number of shares outstanding of registrant's Common Stock, no par value,
                  as of June 15, 1999: 4,220,661 (See Item 11)

                    Documents incorporated by reference: NONE

       Transitional Small Business Disclosure Format (check one): Yes No X

Exhibit index on consecutive page 19                          Page 1 of 40 Pages


<PAGE>



                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS.

THE COMPANY

         Proformance  Research  Organization,  Inc.  ("P.R.O." or the "Company")
earns revenue from three  sources:  (1) providing golf  instruction  services to
recreational  golfers  wishing  to  improve  their  game  or  corporate  clients
utilizing the Destination  Golf Schools  (discussed  below) as part of incentive
programs  or  entertaining   venues;   (2)  training  of  golf  instructors  for
certification  and  to  maintain   accreditation   with  the  Professional  Golf
Association of America (the "PGA");  and (3) sales of golf related products such
as instructional materials and golf equipment, either produced by the Company or
as a reseller  of products  produced  by third  parties.  P.R.O.  provides  golf
instruction  through  three  primary  avenues  - (1)  golf  schools  located  at
independent  resorts,  to which students  generally travel for intensive 2-5 day
programs ("Destination Golf Schools"),  (2) franchised learning centers designed
to cater  primarily to local clientele for hourly lessons  ("Learning  Centers")
and (3) training of golf instructors for teaching certification,  which training
is  conducted  at P.R.O.  headquarters,  Destination  Golf  Schools and Learning
Centers.

         P.R.O.  currently has nine  Destination Golf Schools under contract for
full or partial year operation.  In addition,  P.R.O. is currently operating one
Learning Center.  P.R.O.  leases the facilities for its Destination Golf Schools
at existing golf courses or resorts.  This  arrangement  permits P.R.O. to offer
first rate golf  facilities at relatively low facilities cost and enables P.R.O.
to take advantage of the course's or resort's marketing efforts,  visibility and
facility quality.  P.R.O.  currently markets its own line of instructional video
tapes  and  booklets,  tied to the  curriculum  taught at its  Destination  Golf
Schools and Learning  Centers.  P.R.O.  has signed an agreement to market,  on a
non-exclusive  basis,  the  Dimension  Z Golf line of golf clubs.  In  addition,
P.R.O. has been granted  non-exclusive  distribution  rights to the FILA line of
golf bags, hats, gloves and miscellaneous  golf-related products. P.R.O. intends
to utilize the Slazenger(R) Fitting System at P.R.O. facilities for the purposes
of distributing custom fit putters to P.R.O. students.

         P.R.O.  believes that it is  distinguished  from its competitors on the
basis  of  the  quality  of its  facilities,  its  unique  curriculum,  and  its
experienced  management team and staff. P.R.O.'s curriculum is geared toward the
marketing  premise  that  ideas  accepted  on the  professional  golf  tours are
accepted by recreational  golfers.  The basis of P.R.O.'s curriculum is physical
fitness and focus on the mental approach to the game, which the Company believes
are currently popular among golfers on the professional tours.

CORPORATE HISTORY

         The Company  was  founded in  Colorado  in January  1991 under the name
World  Associates,  Inc. It formed a  subsidiary  in  Delaware in February  1996
originally  called Team  Family,  Inc.,  which  changed its name to  Proformance
Research  Organization,  Inc.  in January  1997.  The  Company  merged into this
subsidiary  effective July 31, 1998,  thereby effecting a  reincorporation  (the
"Reincorporation").  Also, each P.R.O.  Property,  Inc., a Colorado  corporation
("PPI"),  is a  wholly-owned  subsidiary of the Company.  All  references to the
Company herein include the predecessor corporation and PPI.

         Golf  instruction  operations  commenced in the summer of 1996 with the
association  of  Dave  Bisbee  and  the  licensing  of  certain  rights  to golf
instruction  materials from Mr. Bisbee and Sport  Solutions,  Inc. See "ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - Sports Solutions,  Inc. ("SSI")
License" and "Dave Bisbee  Distribution  Agreement." The Company then negotiated
and signed agreements with various golf courses to operate their golf schools at
such courses,  beginning  with an agreement  with Keystone Ranch Resort in March
1997  (which has since  expired).  As outlined  above,  the Company now has nine
Destination Golf Schools and one Learning Center in operation.


                                        2

<PAGE>



INDUSTRY BACKGROUND

         The National Golf Foundation,  a non-profit golf research  organization
(the  "NGF"),  conducts  various  surveys  and  studies of golfers in the United
States.  According  to  excerpts  from  various  studies by the NGF,  there were
approximately  26.5  million  golfers  in the  United  States  age 12 and  over,
compared with 19.9 million golfers in 1986, an increase of 33%. Approximately 12
million of these  golfers  are  between  the age of 18 and 39, 5.0  million  are
between  age 40 and 49 and 6.5  million  were  over  age 50.  Approximately  5.6
million U.S.  golfers are "avid" golfers,  defined as those who play at least 25
rounds of golf per year.  Today's  typical  golfer is male,  39 years old, has a
household income of $63,300 and plays 21 rounds per year. In 1996, golfers spent
about $15.1 billion on equipment, related merchandise and playing fees, compared
to $7.8  billion  in 1986.  Non-golfers  spent an  additional  $1.25  billion on
golf-related items in 1996.

STRATEGY

         The Company  believes  that the three most  important  criteria used by
golfers to select a school are: (1) location,  (2) price,  and (3) product.  Key
elements of P.R.O.'s  strategy are (1) to increase the number of its Destination
Golf Schools and Learning  Centers in the U.S., (2) to stimulate  demand for its
instructor  training  and  certification  program,  (3) to expand  the  products
available  for the  Company  to  market,  through  marketing  arrangements  with
independent  golf  product  manufacturers,  (4) to expand,  through  one or more
majority-owned subsidiaries, into golf course management and development and (5)
to  expand  its  business  into  new  geographic  territories.  There  can be no
assurances that the Company will be able to successfully execute its strategy.

o        INCREASE  THE  NUMBER OF ITS  DESTINATION  GOLF  SCHOOLS  AND  LEARNING
         CENTERS. The Company believes that the most important consideration for
         a golfer deciding which golf school to attend is location.  The Company
         believes that it can attract more students by offering more  locations.
         In expanding to new  locations,  the Company  intends to add sites that
         are consistent with its current high quality of facilities. The Company
         intends  to  maintain a  relatively  low  overhead  cost  structure  by
         negotiating  site  contracts  with rent based on the number of students
         attending the school.  The Company  believes that its existing  student
         booking and billing  operations  can service a substantial  increase in
         volume of  students,  and that  economies  of scale can be  achieved in
         advertising  and other marketing  expenses as new sites are added.  The
         Company  currently has nine  Destination  Golf Schools and one Learning
         Center under contract.  The Company has incurred  significant  expenses
         for site  development,  personnel  and  advertising  relating  to these
         sites.  The  Company  has  attempted  to locate its sites in  different
         geographic  regions with varying golf seasons,  which the Company hopes
         will reduce the effect of  seasonality  on its  business.  As described
         more fully  below,  the Company may expand by acquiring  existing  golf
         school operations.

O        STIMULATE DEMAND FOR ITS INSTRUCTOR TRAINING AND CERTIFICATION PROGRAM.
         The  Company  is  attempting  to gain  brand  name  recognition  of its
         instructor  training and certification  program. In addition to gaining
         revenues  from  training  golf  instructors,  the  Company  intends  to
         maintain a  certified  instructor  membership  program  with a one-time
         membership  fee  plus  annual  dues,  designed  to  help  PGA-certified
         professionals maintain their PGA accreditation.

O        EXPAND THE PRODUCTS AVAILABLE FOR THE COMPANY TO MARKET. In addition to
         marketing  its own line of golf  instructional  products,  the  Company
         recently  entered into a non-exclusive  agreement with Dimension Z Golf
         to  market  their  brand of golf  clubs.  In  addition,  P.R.O.  has an
         agreement   with  FILA  to  market   their  bags,   hats,   gloves  and
         miscellaneous  golf products  through its Destination  Golf Schools and
         Learning Centers.  The Company intends to seek additional  golf-related
         products to market through these channels. In addition,  P.R.O. will be
         utilizing the Slazenger(R) Fitting System at P.R.O.  facilities for the
         purposes of distributing custom fit putters to P.R.O. students.


                                        3

<PAGE>



o        EXPAND  INTO  GOLF  COURSE  MANAGEMENT  AND  DEVELOPMENT.  The  Company
         recently  established  PRO  Property,  Inc.  ("PPI") as a subsidiary to
         pursue  opportunities in golf course  management and development.  With
         the assistance of Vic Kline,  the Company's  strategy is to exploit its
         knowledge  and expertise in the golf business by exploring new lines of
         business, such as managing existing golf courses owned by third parties
         and  development  of new golf courses  under lease  agreements  on land
         owned by third parties.  Any such  facilities  could serve as sites for
         additional  Destination Golf Schools or Learning  Centers.  The Company
         intends to conduct  this  business  through one or more  majority-owned
         subsidiaries with stock ownership offered to management responsible for
         the site. In addition,  financing of any such opportunities may require
         debt  or  equity  financing  at the  subsidiary  level.  See  "ITEM  1.
         BUSINESS--Golf Course Development and Management Strategy" and "ITEM 9.
         DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS  AND  CONTROL   PERSONS;
         COMPLIANCE  WITH SECTION  16(a) OF THE EXCHANGE ACT - Key Employees and
         Consultants."

o        EXPAND  ITS  BUSINESS  INTO NEW  GEOGRAPHIC  TERRITORIES.  The  Company
         intends to establish  Destination  Golf Schools or Learning  Centers at
         additional  sites within the U.S. and at appropriate  sites outside the
         U.S. The Company  currently has an agreement  with Sunkyong  U.S.A.  to
         represent  P.R.O. in the Republic of Korea on an exclusive basis and to
         make introductions throughout the Pacific Rim on a non-exclusive basis,
         for Destination  Golf School,  Learning Center  franchising and product
         sales opportunities. See "--International Operations" below.

THE P.R.O. SCHOOLS

         P.R.O.'s  strategy  is to  operate  its  Destination  Golf  Schools  at
high-quality  existing resorts that have golf facilities.  P.R.O.  currently has
nine  Destination  Golf  Schools and one  Learning  Center  under  contract  for
operation  during  all or  portions  of each  year.  Following  is a list of the
Company's sites and sites under development, along with the date the site became
available to students and the season the site is open. Fees for Destination Golf
Schools  are paid in advance and range from $364 for a 2-day  school  (excluding
lodging) at Brooks Golf Club at Lake Okoboji, Iowa, to $1,392 for a 4-day school
(including lodging) at Wildfire Golf Course at Desert Ridge in Phoenix, Arizona.
Fees for Learning Centers are based on private instruction and range from $47.00
to $100.00 per lesson.

         P.R.O.'s  schools  have been  recognized  by the PGA of America,  which
allows  P.R.O.  to employ,  and in turn  offer  instruction  by,  PGA-accredited
teachers.  At  its  Destination  Golf  Schools  and  Learning  Centers,   P.R.O.
instructors teach a system developed by Dave Bisbee that combines instruction in
all areas of golf technique  with  instruction in mental aspects of the game and
physical  conditioning to improve play.  Instructors  assess the student's skill
level  and   learning   style,   developing  a  personal   golfer   profile  for
individualized instruction. At P.R.O. Destination Golf Schools, access to a golf
course  on site is  included  in each 2-,  3- or 4-day  package.  See  "ITEM 12.
CERTAIN  RELATIONSHIPS AND RELATED  TRANSACTIONS" for information  regarding the
distribution agreement with Mr.
Bisbee.

<TABLE>

<CAPTION>

SITE NAME                       ADDRESS                         DATE OPENED         SEASON              LEASE EXPIRES
---------                       -------                         -----------         ------              -------------
<S>                             <C>                             <C>                 <C>                 <C>
DESTINATION GOLF SCHOOLS

Mission Inn                     10400 County Road 48            February 1999       Mid-February        June 19991<F1>
Golf & Tennis Club1<F1>         Howey in the Hills, Florida                         to late-June

Wildfire Golf Course at         5225 East Pathfinder            September 1997      Mid-September       September 1999
Desert Ridge                    Phoenix, Arizona                                    to mid-May

Haymaker Golf Course            P.O. Box 2995                   May 1999            May to mid-         October 1999
                                Steamboat Springs,                                  October
                                Colorado

Pole Creek Golf Club            P.O. Box 3348                   April 1999          April to            November 1999
                                Winter Park, Colorado                               November

Carlton Oaks Country Club       9200 Inwood Drive               March 1998          Year Round          November 2000


                                                         4

<PAGE>


<CAPTION>

SITE NAME                       Address                         Date Opened         Season              Lease Expires
<S>                             <C>                             <C>                 <C>                 <C>
                                Santee, California
                                (San Diego area)

Rhodes Ranch                    7881 South Durango Drive        March 1998          Mid-September       December 1999
                                Las Vegas, Nevada                                   to mid-May

Brooks Golf Club                1405 Highway 71                 June 1998           Mid-May to          September 2000
                                Lake Okoboji, Iowa                                  mid-September

Omni Tucson National2<F2>       2727 W. Club Drive              March 19992<F2>     Mid-September
                                Tucson, Arizona                                     to mid-May

Bardmoor Golf Club              7919 Bardmoor Boulevard         January 1999        Mid-September       April 2000
                                Largo, Florida                                      to mid-May
                                (St. Petersburg area)

LEARNING CENTERS

Plum Creek Golf &               311 Players Club Drive          June 1998           April to            December 1999
Country Club                    Castle Rock, Colorado                               September

<FN>
<F1>
1    The renewal of the lease is in process.
<F2>
2    Site under contract but not yet open; date indicates planned opening date.
</FN>
</TABLE>

DESTINATION GOLF SCHOOLS

         Wildfire Golf Course at Desert Ridge is owned by Crown Golf Properties,
Inc.  ("Crown"),  which owns or operates 30 golf facilities  worldwide.  Through
expansion of its relationship  with Crown,  opening  Destination Golf Schools at
facilities  in the  U.S.  or  abroad  owned  by  other  parties,  and  potential
acquisitions of existing golf schools,  the Company currently plans to expand to
as many as 60 total sites  within the next five years.  P.R.O.  is  currently in
negotiation  with other golf resort owners to open additional  Destination  Golf
Schools in Myrtle  Beach,  South  Carolina;  Palm  Springs,  California;  Aspen,
Colorado; and San Francisco,  California. There can be no assurances that P.R.O.
will be able to identify and enter into contracts with any additional sites.

         P.R.O.  contracts  with the owners of each  facility  to provide a golf
school at the existing  golf  facility and pays rent for the use of a portion of
the  facility.  Certain  golf  facilities  prefer to  outsource  the golf school
function  rather  than  be  responsible   for  the  overhead  of   establishing,
maintaining and marketing a golf school, and to date the Company has had success
in negotiating  site  agreements  with ten  facilities  (nine  Destination  Golf
Schools and one  Learning  Center).  In addition,  P.R.O.'s  operation of a golf
school at an existing  facility  provides  the facility  with higher  visibility
through  P.R.O.'s  advertising  efforts and  additional  revenue  through  guest
nights,  rounds of golf,  meals,  merchandise and other purchases by P.R.O. golf
school students. Due to this mutually-beneficial  arrangement,  the rent charged
P.R.O.  for using the facilities has been  relatively  low,  allowing  P.R.O. to
maintain  low  operating   costs  while   offering  its  students   high-quality
facilities.  In addition,  this  arrangement  permits P.R.O. to offer first rate
golf  facilities at relatively  low facilities  cost and enables P.R.O.  to take
advantage of the course's or resort's marketing efforts, visibility and facility
quality  without  incurring the enormous  capital  requirements  and advertising
budgets needed to establish, maintain and market such facilities. Initially, the
Company entered into leases that provided for fixed monthly rental, however, the
Company's  current  lease fee at six of its  sites  are  based on the  number of
students  attending  schools at the site,  thereby  reducing the Company's fixed
expenses. The Company pays a fixed rent at the other four sites. There can be no
assurances that the Company will continue to enter into variable rent leases.


                                        5

<PAGE>



LEARNING CENTERS

         In  contrast  to  Destination  Golf  Schools,   which  are  located  at
independent resorts with golf courses,  Learning Centers are located or proposed
to be  located  at other  independent  sites  where  golf  instruction  might be
available,  such as driving  ranges,  golf  equipment  stores  and golf  courses
oriented to a local clientele. P.R.O. currently operates one Learning Center. In
the  U.S.,  P.R.O.   intends  to  lease  and  operate  Learning   Centers,   but
internationally   intends  to  franchise  locally-owned  and  operated  Learning
Centers.  Management believes that, in addition to receiving direct revenue from
Learning  Centers,  an increased  local  presence  from  Learning  Centers would
increase the  visibility of its name and  curriculum  and result in referrals to
its  Destination  Golf Schools.  To encourage such referrals,  P.R.O.  may pay a
referral  bonus to  Learning  Center  staff for  referred  students  who  attend
Destination Golf Schools.

ACQUISITIONS AND SITE START-UP COSTS

         Management  of the  Company  believes  that  there are many  single and
multiple location golf school operations whose owners may see certain advantages
to being part of a larger  organization  with several  locations.  Approximately
$500,000 of the net proceeds from the Company's  initial public offering,  which
is  expected  to  close  in June  1999,  has been  allocated  for  acquisitions.
Management  believes  that it can acquire such  existing  golf  schools  using a
combination  of stock  and  cash.  As of the date of this  report,  there are no
understandings, agreements, or arrangements for any acquisitions.

         The expenses  associated  with opening new sites  pertain to recruiting
and training instructors and staff, rent, and advertising.  These start-up costs
of establishing  these new facilities are incurred in advance of advertising the
sites and booking students into the sites.  Having established an infrastructure
for its  Destination  Golf School and  Learning  Center  operations,  management
believes  that the Company can now achieve  economies of scale in certain of its
operations, in particular advertising,  student bookings, and billing. A portion
of the net  proceeds  from  the  Company's  initial  public  offering  has  been
allocated for site start-up  costs.  See "ITEM 6.  MANAGEMENT'S  DISCUSSION  AND
ANALYSIS OR PLAN OF OPERATIONS."

INSTRUCTOR CERTIFICATION

         In addition to providing instruction for recreational  golfers,  P.R.O.
has  developed an  instructor  certification  program to enable  instructors  to
fulfill in part their  annual  accreditation  requirements  to  maintain  PGA of
America membership.  Instructor certification involves a 4-day in-depth workshop
to become  certified in P.R.O.'s  system.  Upon completion of the training,  the
participant becomes certified as a P.R.O. Certified Instructor. The fee for this
training  is  $5,000  and is paid in  advance.  Once  certified,  the  Certified
Instructor    automatically    becomes    eligible    to    distribute    P.R.O.
instruction-related  products and services,  receives  commissions for referring
students to  Destination  Golf  Schools and may be  contracted  with to teach in
P.R.O.  schools. The cost of membership in P.R.O.'s Certified Instructor program
is a  $5,000.00  initiation  fee  and  $1,000.00  in  annual  dues  to  be  paid
semi-annually.

DISTRIBUTOR MEMBERSHIP

         As of June  10,  1999,  P.R.O.  has  agreements  with  12  Distributors
nationwide  to  facilitate  the sales of packages of golf  instruction  into the
corporate market (called the Premium Links program).  P.R.O. intends to continue
to establish a network of Distributor Members in defined geographical locations.
These Distributors have non-exclusive marketing rights to P.R.O.'s Premium Links
programs within their territory. P.R.O. has identified 100 territories.  For the
marketing  rights to these  programs,  the  Distributor  pays a one-time  fee of
$25,000 which entitles the  Distributor to an extensive  training as well as the
programs,  products,  and  services  that  P.R.O.  has  created  with a  rolling
commission  schedule  of up to 25%  payable  to the  Distributor  on the sale of
Premium Links programs.  As of December 31, 1998,  P.R.O. had received  deposits
from four  Distributors  totaling  $115,000.  As of June 10,  1999,  P.R.O.  had
received  the  $25,000 fee from all 12 of the  Distributors.  The fees have been
accounted for as deferred revenue on P.R.O.'s financial statements.


                                        6

<PAGE>



PRODUCT SALES

         In addition to golf instruction services,  P.R.O. sells its own line of
golf instructional  videos, books and training aids. A key component of P.R.O.'s
strategy  for growth is to expand into  marketing of  golf-related  products for
independent   manufacturers.   On  July  21,  1998,  P.R.O.  signed  a  one-year
distributor  agreement  with  Renaissance  Golf  Products Inc.  granting  P.R.O.
non-exclusive  distribution  rights to the FILA line of golf goods including but
not limited to golf clubs, bags, balls,  gloves, head wear, head covers,  travel
cases, umbrellas,  and towels (the "FILA Agreement").  Under the FILA Agreement,
P.R.O. has non-exclusive  distribution rights in connection with its Destination
Golf Schools, Learning Centers and certified instructors,  as well as the rights
to appoint sub-distributors at such facilities.  P.R.O. does not intend to renew
the FILA Agreement.  P.R.O.  is also a  non-exclusive  distributor of golf clubs
manufactured by Dimension Z Golf.

         In addition,  P.R.O. will be utilizing the Slazenger(R)  Fitting System
at P.R.O.  facilities  for the  purposes of  distributing  custom fit putters to
P.R.O. students. The Company proposes to have the equipment for this custom club
fitting at all Destination Golf Schools and Learning Center locations. A portion
of the net  proceeds  from  the  Company's  initial  public  offering  has  been
allocated  for this  type of  equipment  as well as an  inventory  of the  items
mentioned in the preceding paragraph.

GOLF COURSE DEVELOPMENT AND MANAGEMENT STRATEGY

         A key  component of the Company's  expansion  strategy is to enter into
the business of  developing  and managing golf  facilities,  such as courses and
driving ranges. In addition to receiving management fees at any such facilities,
the Company may be able to locate  Destination  Golf Schools or  Company-managed
Learning Centers at any such facilities.  The Company, through PPI, is currently
in  negotiation  with the owner of one site who intends to develop a golf course
on that site, for management of the golf course.

         The  near-term  plans  for that site  call for  construction  of a golf
practice  facility  first and later a golf course.  The golf  practice  facility
would be more than the typical  driving  range.  The proposal  includes  landing
areas for the range that resemble  conditions  typically found on a golf course,
chipping  greens,  and  putting  greens.  Approximately  $1,000,000  of the  net
proceeds from the Company's  initial public offering has been allocated for this
project.  As of June 22, 1999, the Company does not have a signed agreement with
the owner of the site and the approvals necessary from local authorities for the
proposed facility construction.

         There can be no assurance  that the Company will be  successful  in its
negotiations relative to this site or any future sites, or, if successful,  when
such sites will become  operational.  The golf course development and management
business involves  significantly greater capital requirements than the Company's
current  instruction and product  marketing  lines of business.  There can be no
assurance  that such  capital  will be  available  to the  Company at all, at an
acceptable  cost or on a basis  that is  timely  relative  to the  schedules  of
particular projects. If the Company is unable to raise capital,  through debt or
equity markets,  at appropriate  times and acceptable  costs, the Company may be
unable  to  take   advantage  of  any  available   development   and  management
opportunities.  If the Company is able to raise capital, shareholders may suffer
dilution of their ownership.

INTERNATIONAL OPERATIONS

         On May 6, 1997,  P.R.O.  signed a  five-year  agreement  with  Sunkyong
U.S.A.  (the  "Sunkyong  Agreement"),  under  which  Sunkyong  U.S.A.  agreed to
represent  P.R.O. in the Republic of Korea ("South Korea") on an exclusive basis
and to provide  introductions to parties on a non-exclusive basis throughout the
Pacific  Rim  relating  to  product  sales,   Learning  Center   franchises  and
Destination Golf School  opportunities at sites in the Pacific Rim. Details with
respect to each site and fees to be paid to Sunkyong U.S.A. are to be negotiated
on a site-by-site  basis. The Sunkyong  Agreement  provides that Sunkyong U.S.A.
has the option to purchase up to 10,000 shares of P.R.O. common stock at a price
of $5.00 per share for each  Destination  Golf  School  site,  up to 32 sites in
total. Sites are subject to Company approval.  If all 32 sites are opened within
the 5-year term of the Sunkyong Agreement, the Company may be obligated to issue
320,000 additional shares of common stock. P.R.O. intends to contract with other
companies to introduce

                                        7

<PAGE>



additional  products to Sunkyong U.S.A. for them to identify potential marketers
of such products.  Several  companies have already  communicated  to the Company
their desire to access distribution in the Pacific Rim.

         However,  due to the current business and financial  conditions in Asia
generally  and South Korea in  particular,  the Company has done no  significant
business to date under the Sunkyong Agreement,  and expects to do no significant
business  under that  agreement  until such time as Asian business and financial
conditions  improve.  No assurance  can be given as to when that  recovery  will
occur  or that  P.R.O.  will  have  any  significant  operations  in Asia in the
foreseeable future.

MARKETING

         P.R.O.  markets its products and services primarily through advertising
campaigns in various media. To date,  P.R.O. has had a limited marketing budget.
A key  component of P.R.O.'s  strategy is to use a portion of the proceeds  from
the Company's initial public offering (approximately $1,000,000) for an expanded
advertising campaign to stimulate additional awareness and recognition of P.R.O.
and its services and  products.  P.R.O.'s  marketing  department  has  conducted
research on the circulation,  reader  characteristics,  and editorial content of
various golf publications.  P.R.O.'s  advertising and article placement strategy
is intended to provide  national  exposure,  credibility  and demand in the golf
market.  P.R.O.'s  marketing  strategy is planned to be broad  based,  combining
advertising  in  golf  publications,   such  as  Golf  Digest,  with  cross-over
advertising  in  other  media  intended  to  reach  targeted   demographic   and
psychographic   groups.   These  media  include  high-end  business  and  travel
publications as well as electronic  media.  P.R.O.  currently  advertises in the
Ambassador,  an in-flight  magazine on all TWA  flights,  as well as the America
West in flight magazine nationwide.  Management intends to use proceeds from the
Company's  offering for larger ads running for  consecutive  months to establish
some degree of name recognition with its targeted audience. The Company has also
purchased time on The Golf Channel to air a one-minute advertisement narrated by
nationally  recognized  golf  personality Ben Wright.  In addition,  the Company
hopes to take advantage of the marketing efforts of Renaissance, FILA, Dimension
Z, Slazenger and the operators of its Destination  Golf School sites, as well as
any future  strategic  alliances to expose P.R.O. to a wider audience at no cost
to the Company.

         A  part  of  P.R.O.'s  marketing   execution  strategy  is  to  contact
publications with articles of interest to the golfing public. As an example, the
February  1997 issue of Golf  Illustrated  featured an article on the  "Player's
Edge" Instructional System,  including the mental and physical programs, by Dave
Bisbee, the Executive Director of P.R.O.

         The Company  believes  that,  historically,  recreational  golfers have
accepted  and adopted  ideas used on the  professional  golf tours.  The Company
intends to market its schools by keying on the physical and mental components of
its curriculum in  conjunction  with the widespread use of fitness vans that now
travel with the PGA Tour and the fact that many PGA Tour  professionals  now use
sports psychologists as part of their normal preparation. In addition, P.R.O. is
currently in discussion with a number of PGA Tour  professionals  to find one or
more spokesmen for the Company.  There can be no assurance that the Company will
be able to engage a PGA Tour  professional  to act as a spokesman.  In addition,
the  Company  expects  that  engaging  a PGA  Tour  professional  would  involve
significant  compensation  to  such  individual,  in the  form of  cash,  stock,
options, or other compensation.

         One target of P.R.O.'s  marketing  efforts  relating to its Destination
Golf Schools is executive training programs for the corporate market. P.R.O. has
created  incentive  packages for corporations to reward  performance,  entertain
clients or as  incentives  for sales  projects.  P.R.O.  has  conducted  30 such
programs to date,  with an average  attendance  of 10 people.  P.R.O.  marketing
staff  attempts  to make  direct  contact  with  the  corporate  market  through
advertising in trade journals, appearances at trade shows, and telephone calls.


                                        8

<PAGE>



INTELLECTUAL PROPERTY

         The Company owns the registered trademarks P.R.O., Proformance Research
Organization,  CGT and CGTA.  While the Company has  licensed  the rights to use
Player's Edge, Mental Edge, and P.A.R. System,  which are registered  trademarks
owned by Dave Bisbee and Sports  Solutions,  Inc.,  the Company  emphasizes  the
"P.R.O." trademark on its line of instructional video tapes and booklets tied to
the curriculum taught at its Destination Golf Schools and learning Centers.  See
"ITEM 12. CERTAIN  RELATIONSHIPS  AND RELATED  TRANSACTIONS - Sports  Solutions,
Inc. License" and "- Dave Bisbee Distribution Agreement."

COMPETITION

         The  golf  instruction  market  is  highly  fragmented,   with  lessons
available at a vast number of local golf courses, driving ranges and golf shops,
as well as a large number of destination golf schools. The Company's Destination
Golf Schools and  Learning  Centers  compete  with all of these  sources of golf
instruction.  Shaw Guides, an Internet travel  information  source that compiles
golf  instruction  facilities  lists  hundreds  of  different  sources  of  golf
instruction  in the U.S.  Many of the local  sites with which  P.R.O.'s  schools
compete have greater  local name  recognition  and  resources  than the Company.
P.R.O.'s  Destination Golf Schools compete with several destination golf schools
operated  throughout  the  U.S.,  including  John  Jacobs  Golf  Schools,  David
Leadbetter Golf Academy,  Nicklaus/Flick  Game  Improvement,  Arnold Palmer Golf
Academy and Golf Digest  Schools.  Many of the schools with which the  Company's
Destination  Golf Schools  compete have greater  resources,  a larger  number of
sites, more prestigious  locations or affiliations with well-known and respected
golfers or golf  instructors  than the Company.  For  example,  John Jacobs Golf
Schools has 30 schools and Golf Digest  Schools offer  instruction  at 15 sites.
While the Company's  management believes that the Company's program is unique in
its  emphasis  on the  mental  approach  to golf and its  emphasis  on  physical
conditioning,  there  can be no  assurances  that  the  Company  will be able to
compete in the marketplace.

EMPLOYEES

         As of  May 1,  1999,  the  Company  had 22  full-time  and 4  part-time
employees.  None of the Company's employees is represented by a labor union. The
Company believes that its relationship with its employees is good.


ITEM 2.           DESCRIPTION OF PROPERTY.

         The  Company  leases  approximately  6,200  square  feet of  space  for
administrative,  office, and marketing  functions in Denver,  Colorado,  through
September 30, 1999.  The Company's  rent is currently  approximately  $2,500 per
month.  The Company  believes  that this property will be sufficient to meet its
needs for the duration of the lease.


ITEM 3.           LEGAL PROCEEDINGS.

         Not Applicable.


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

         Not Applicable.




                                        9

<PAGE>



                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         As of June 22, 1999, no public market exists for the Company's shares.

         As of June 15,  1999,  there were 194 record  holders of the  Company's
Common Stock, including shares held by the Company as treasury shares.

         During the last two fiscal years,  no cash dividends have been declared
on the Company's Common Stock.

RECENT SALES OF UNREGISTERED SECURITIES

         During  1998,  the  Company  has  issued  and  sold  the   unregistered
securities as described below.

         The Company issued 135,213 shares of Common Stock valued at $193,305 as
inducements for loan funds received to an employee of the Company and his family
members (all of whom are accredited investors), accredited investor customers of
the Global  Financial  Group,  Inc., the  underwriter  of the Company's  pending
public  offering,  and  other  accredited  investors  (some  of whom are past or
present business associates of Company employees).

         The Company issued 2,502 shares of Common Stock for services  valued at
$3,578 to one individual.

         The  Company  sold  378,700  shares  of  Series A  Preferred  Stock for
$541,000 in cash to accredited  investor  customers of Global  Financial  Group,
Inc. and other  accredited  investors (some of whom are past or present business
associates of Company employees or family members of Company employees).

         The Company issued 70,000 shares of Series A Preferred Stock in payment
of debentures in the total amount of $100,000 to two individuals.

         The Company issued 123,000  warrants to purchase  Common Stock at $6.00
per share as  inducements  for making  bridge loans to the Company to accredited
investor  customers of Global Financial Group,  Inc., a non-accredited  business
associate of an  employee,  and a  non-accredited  investor who had made similar
types of investments in the past.

         The sale and issuance of securities in the transactions described above
were deemed to be exempt from registration under the Securities Act by virtue of
Section 4(2).  Appropriate legends were affixed to the stock certificates issued
in the above  transactions.  Similar legends were imposed in connection with any
subsequent sales of any such securities. The securities were offered and sold by
the Company without any  underwriters,  except for the Global  Financial  Group,
Inc.   assistance  noted  above.  All  of  the  purchasers  were  deemed  to  be
sophisticated  with respect to an  investment  in  securities  of the Company by
virtue of their financial condition and/or relationship to members of management
of the Company.  For sales made with the assistance of Global  Financial  Group,
Inc.,  Global was paid a cash sales commission of 10% of the cash  consideration
received by the Company and warrants to purchase  Common Stock.  These  warrants
were later returned to the Company by Global for cancellation.


ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

OVERVIEW

         P.R.O.  provides golf instruction  through three primary avenues - golf
schools located at resorts, to which students generally travel for intensive 2-4
day programs  ("Destination  Golf Schools"),  learning centers designed to cater
primarily  to local  clientele  for hourly  lessons  ("Learning  Centers"),  and
training of golf instructors for teaching  certification.  P.R.O.  currently has
nine Destination Golf Schools under contract for full or partial year operation,
and

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<PAGE>



is currently  operating one Learning Center. The Company expected to be financed
in January of 1998 and the delay in financing created a cash-flow problem due to
the financial commitments that had been made to each of these facilities.

         P.R.O.  leases  the  facilities  for its  Destination  Golf  Schools at
existing  golf  courses or  resorts,  allowing  P.R.O.  to offer first rate golf
facilities  at  relatively  low  facilities  cost and  allowing  P.R.O.  to take
advantage of the course's or resort's marketing efforts, visibility and facility
quality. P.R.O. began operation of Destination Golf Schools at the locations and
dates  indicated  below:  Mission  Inn Golf & Tennis  Club,  Howey in the Hills,
Florida,  February 1999; Haymaker,  Steamboat Springs,  Colorado, May 1999; Pole
Creek Golf Club,  Winter Park,  Colorado,  April 1999;  Wildfire  Golf Course at
Desert  Ridge  ("Wildfire"),  Phoenix,  Arizona,  September  1997;  Carlton Oaks
Country Club, San Diego area,  California,  March 1998;  Brooks Golf Club,  Lake
Okoboji, Iowa, June 1998; Bardmoor Golf Club, St. Petersburg,  Florida,  January
1999; and Tucson  National,  Tucson,  Arizona,  March 1999. In addition,  P.R.O.
began  operation of a Learning  Center at the Plum Creek Golf and Country  Club,
Castle Rock, Colorado in June 1998.

         P.R.O. is currently in negotiation to open additional  Destination Golf
Schools  in Myrtle  Beach,  South  Carolina;  Orlando,  Florida;  Palm  Springs,
California;  Aspen, Colorado; and San Francisco,  California. Such negotiations,
however,  are  still in  process  and  there is no  assurance  that any of these
locations will become P.R.O. instructional facilities.

         P.R.O.'s  Destination  Golf Schools and Learning Centers have opened at
varying times over the past two years,  and most of the Destination Golf Schools
are closed  during  local  off-seasons.  As a result of changes in the number of
facilities open from period to period,  closing certain of the Destination  Golf
Schools during local off-seasons,  and overall seasonality of the golf business,
results of  operations  for any  particular  period may not be indicative of the
results of operations for any other period.

         The Company has made a strategic decision to open several sites for its
Destination Golf Schools and Learning  Centers,  despite the fact that there are
significant  one-time and recurring expenses  associated with opening each site,
and despite the fact that its existing sites were not operating at capacity.

         Originally,  most site contracts for P.R.O.'s  Destination Golf Schools
provided for a fixed amount of monthly rent. P.R.O. has subsequently  negotiated
a  per-student  rent for six of its ten site  contracts,  reducing the Company's
fixed costs.

         For each Destination Golf School and Learning Center, the Company hires
a site  manager  and a number  of  certified  instructors  based on  anticipated
demand. The Company offers 6 levels of instructor  certification.  Site managers
are required to complete level 4  certification,  and certified  instructors are
required to complete level 2 certification.  Although level 2 certification  can
be achieved in a single  session,  level 4  certification  requires at least one
additional  session.  The Company  provides  training for its site  managers and
certified instructors at Company expense.

         For a brief  time,  the  Company  marketed a line of books and  related
products in the family self-help market, under the name Team Family(TM). The
Company  discontinued  that  line of  business  in 1996,  and  devoted  its full
resources  to its current  golf  operations.  The  Company's  audited  financial
statements  have  been  adjusted  to  exclude  the  effect  of the  discontinued
operations, and the Company's results of operations for the years ended December
31, 1997 and 1998 each include a loss of $3,063 related to the estimated loss on
the  anticipated  disposition  of the assets  related to the Team Family line of
business.  See the  Financial  Statements  and the Note  entitled  "Discontinued
Operations" in the Notes to the Financial Statements.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1998

         TOTAL  REVENUE.  The Company had total revenue of $119,072 for the year
ended  December  31,  1997,  compared to $189,740 of total  revenue for the year
ended  December  31,  1998.  The  increase  in total  revenue  was  attributable
primarily to the increase in the number of Destination  Golf School and Learning
Center sites operating in the 1998 period.  During the first ten months of 1997,
the Company had one  Destination  Golf School - Keystone,  Colorado - open for a
total of four months.  During the year ended  December 31, 1998, the Company had
several sites open during

                                       11

<PAGE>


portions of that year: Wildfire (Phoenix); Carlton Oaks (San Diego area); Rhodes
Ranch (Las Vegas);  Keystone;  Brooks (Lake  Okoboji);  Huff House  (Catskills);
Scottsdale Learning Center; and Plum Creek (Denver area) Learning Center.

         COST OF REVENUE.  Cost of revenues for the year ended December 31, 1997
was  $95,545 or 80% of total  revenue,  compared  to  $353,268  or 186% of total
revenue for the year ended December 31, 1998. Cost of revenue consists primarily
of instructor salaries. The increase in cost of revenue as a percentage of total
revenue in 1998 was due primarily to hiring of instructors for the Company's new
sites, which operated below capacity.  Opening of several sites was delayed, and
revenue at open sites was  negatively  impacted,  by the effects of an unusually
wet winter in January, February and March 1998. See "Seasonality" below.

         SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  Selling,  general and
administrative  expenses,  consisting  primarily  of marketing  and  advertising
expenses,  expenses associated with recruiting and training P.R.O.'s Destination
Golf School and  Learning  Center site  managers and  instructors,  salaries for
administrative,   sales  and  marketing   staff,   and  rent  at  the  Company's
headquarters,  increased  from $628,214 for the year ended  December 31, 1997 to
$2,057,805  for the year ended December 31, 1998. The increase was due primarily
to expenses  associated  with  recruiting and training  instructors  for the new
sites, expenses associated with opening the new sites and rent at the new sites,
and establishing its Distributor  Membership program.  The Company believes that
its long-term cost structure will be more  advantageous  with site rentals based
on fixed fees, and signed its new leases on this basis.  However, the Company is
currently  operating below capacity at all of its sites. The Company  determined
to lower its short-term cost structure by negotiating a per-student rent for six
of its ten its summer sites.  Although this decreases the Company's fixed costs,
if  student  volume  is  increased  at the sites  with per  student  rents,  the
Company's costs could actually be higher at those sites than at sites with fixed
rents.

         The Company made a strategic  decision to renegotiate  the rent at some
of its sites because the Company hopes to receive  financing  that will allow it
to engage in its planned  advertising  campaign by July 1999.  Most of the fixed
rent sites are winter  sites.  The  Company  hopes that  engaging in the planned
advertising  campaign will allow volume at the fixed rent sites to be sufficient
to  support  the fixed  fee  rents.  However,  there  can be no  assurance  that
financing  will be  received in time to engage in such  advertising  campaign in
time to achieve  sufficient volume at these sites to offset the fixed fee rents,
or that such advertising  campaign,  if begun,  will result in increased student
volume.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

         Results for the year ended  December 31, 1997 reflect the  operation of
the  Keystone  Destination  Golf  School  for  three  months  and  the  Wildfire
Destination Golf School for four months. Results for the year ended December 31,
1996 reflect the Company's live test of its instructor  certification program to
produce data regarding its marketability and franchising methods. As a result of
the change in the nature of the Company's  operations from period to period, the
comparison between the 1997 and 1996 periods may not necessarily be meaningful.

         Total  revenue for 1997 was  $119,072 as compared to $188,455 for 1996.
Revenue in 1997 was derived  primarily from the operation of P.R.O.  Destination
Golf Schools at Keystone and Wildfire,  for three and four months  respectively.
Revenue in 1996 was derived primarily from the instructor certification program.

         Cost of  revenue  was  $95,545 or 80.2% of sales in 1997,  compared  to
$7,251 or 3.8% of sales in 1996. Cost of revenue in 1997 related to revenue from
Destination  Golf  Schools  and  consisted  primarily  of site  rental  fees and
instructor  salaries.  Cost of revenue in 1996 related primarily to revenue from
the instructor certification program, a classroom program which was conducted in
the Company's  headquarters  at no  additional  facilities  cost.  Costs of this
program were primarily instructor salaries and program materials.

         Selling,  general and administrative  expenses  consisted  primarily of
marketing and  advertising  expenses,  expenses  associated  with recruiting and
training P.R.O.'s  Destination Golf School and Learning Center site managers and
instructors, salaries for administrative, sales and marketing staff, and rent at
the  Company's  headquarters.   Selling,  general  and  administrative  expenses
increased to $678,214 in 1997 from $366,496 in 1996,  an increase of 85%.  These
expenses  were  greater  in 1997  because  the  Company  was in the  process  of
identifying sites for its Destination Golf

                                       12

<PAGE>


Schools and Learning  Centers,  establishing  sites,  training staff for the new
sites, and advertising its new facilities.  These start-up costs of establishing
these new  facilities  are  incurred  in  advance of  advertising  the sites and
booking students into the sites.  Having  established an infrastructure  for its
Destination Golf School and Learning Center operations, management believes that
the Company can now achieve economies of scale in certain of its operations,  in
particular advertising, student bookings, and billing.

LIQUIDITY AND CAPITAL RESOURCES

         The cash requirements of funding P.R.O.'s operations and expansion have
exceeded cash flow from operations.  The Company has satisfied its capital needs
primarily through debt and equity financing.  The Company  continually  explores
raising additional capital through such means. The Company has an agreement with
an entity  controlled  by a member of its Board of  Directors  under  which such
entity  will  subscribe  for any  Shares  not  otherwise  subscribed  for in the
offering.  See "ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - Weiner
Subscription Agreement."

         Of the Company's $189,413 in long-term  indebtedness  outstanding as of
December 31, 1998,  $160,000 bears interest at a fixed rate of 12% and is due in
2002.  Such  indebtedness  is convertible  into Common Stock of the Company at a
rate of $1.43 per share. Such indebtedness may be prepaid by the Company upon 30
days' notice.  The Company  presently does not intend to call such  indebtedness
for prepayment. The remainder of the Company's long-term indebtedness relates to
a note for an automobile which bears interest at the rate of 8.9% and is payable
in 42 monthly installments.

         At December 31, 1998,  short-term  notes  payable was  $1,040,577.  The
Company has allocated  $550,000 of the proceeds from its initial public offering
for the repayment of short-term debt.

         The proceeds  from the  Company's  initial  public  offering  have been
allocated  primarily for  expansion  and growth types of purposes,  such as site
development for a new golf practice facility,  advertising, the costs of opening
new  facilities,  acquisitions,  and product  inventory.  Only $550,000 has been
allocated  for repayment of short-term  debt and bridge loans.  Accordingly,  it
will  become  necessary  for the  Company's  existing  operations  to be able to
generate  enough cash to cover existing  commitments  and  obligations,  such as
lease rent for the facilities,  instructors'  salaries,  and officers' salaries.
The Company is obligated,  pursuant to a five-year  employment  agreement to pay
William D. Leary,  the  President of the Company,  an annual salary of $120,000.
See "ITEM 12. CERTAIN  RELATIONSHIPS AND RELATED TRANSACTIONS - Leary Employment
Agreement."

         The  Company  believes  that  the  proceeds  from  its  initial  public
offering,  in conjunction  with its existing cash balances and anticipated  cash
from  operations,  will be  sufficient  to meet the  Company's  current  working
capital  needs for at least the next  twelve  months.  However,  there can be no
assurance  that the Company will not need to raise  additional  capital  sooner,
particularly  to take  advantage of any expansion  opportunities,  not currently
anticipated, that may become available. In such event, there can be no assurance
that additional capital will be available at all, at an acceptable cost, or on a
basis that is timely to allow the Company to finance any such opportunities.

         As stated in the  auditors'  report on the  Financial  Statements,  the
Company  incurred a net loss of  $2,133,279  for the 1998  fiscal  year,  and at
December 31, 1998, its current liabilities exceeded current assets by $1,663,880
and its total  liabilities  exceeded total assets by $1,786,624.  These factors,
among others, raise substantial doubt about the Company's ability to continue as
a going concern. See the Note entitled "Continuing Losses, Deficit in Equity and
Negative Working Capital" in the Notes to the Financial Statements.

SEASONALITY

         Throughout  much of the U.S., the golf business is seasonal,  operating
primarily in the summer and  additionally  in the spring and fall.  However,  in
much of the Southern U.S.,  golf is played either  year-round or all year except
for the summer.  This is primarily due to an outdoor  playing  season limited by
inclement  weather or excessive heat. The Company  believes that business at its
Destination Golf Schools will be seasonal with increased  activity in the winter
as students take winter  vacations to warm weather  destinations,  and decreased
activity in the summer. In particular,  the Company expects  decreased  revenues
from Destination Golf School operations in May and September each year. The

                                       13

<PAGE>

Company  closes down many of its warm  weather  sites in May,  with the staff of
those sites  moving to a summer  site,  and closes its summer sites in September
with the staff  returning to their warm weather  sites.  In each case,  there is
expected  to be a one week lag  between  when one site closes and the other site
opens.  For example,  the Company's site manager and certified  instructors  for
Wildfire  will  generally  move to Pole Creek or Haymaker for the summer and the
staff from  Rhodes  Ranch in Las Vegas will move to Lake  Okoboji,  Iowa for the
summer. Of the Company's nine current Destination Golf Schools, three facilities
will close during the summer (Phoenix, Tucson and Las Vegas), three will be open
only during the summer (Winter Park, Steamboat Springs and Lake Okoboji,  Iowa),
and the remaining three will be open year-round (San Diego,  St.  Petersburg and
Orlando). Also, the Company's operations are subject to the effects of inclement
weather  from time to time  even  during  the  seasons  that  they are open.  In
particular,  in January and February 1998, the Company's facility in Phoenix was
closed for an  unusually  high number of days and the  opening of the  Company's
facilities in San Diego and St. Petersburg were delayed due to the effects of El
Nino. The timing of any new facility  openings,  the seasons any such facilities
are open,  the  effects of unusual  weather  patterns  and the  seasons in which
students are inclined to attend golf schools are expected to cause the Company's
future  results of  operations  to vary  significantly  from quarter to quarter.
Accordingly, period-to-period comparisons will not necessarily be meaningful and
should  not be relied on as  indicative  of future  results.  In  addition,  the
Company's  business and results of operations  could be materially and adversely
affected by future  weather  patterns that cause its sites to be closed,  either
for an unusually large number of days or on particular days on which the Company
had booked a special  event or a large number of  students.  Because most of the
students  at the  Company's  Destination  Golf  Schools  attend  the  school  on
vacation,  the  student  may  not  be  able  to or  interested  in  rescheduling
attendance  at one of the Company's  sites.  As a result,  student-days  lost to
inclement weather may truly represent a loss, rather than merely a deferral,  of
revenue.

IMPACT OF THE YEAR 2000

         Management  of the Company  believes  that it is prepared for Year 2000
problems.  It has  assessed its  operational  procedures.  Reservations  for the
Company's  golf schools are generally  made four to eight weeks ahead of time. A
student provides the Company with a credit card number for payment.  The Company
processes the credit card payment.  Immediately thereafter,  the Company sends a
written   confirmation   of  the   reservation   and  payment  to  the  student.
Approximately  ten days before the  attendance  date,  the Company sends another
confirmation/itinerary  to the student.  While software is used for  reservation
processing,  administrative  operations,  and certain banking operations such as
credit card processing, physical records of all of these functions are also kept
in individual  student files and appropriate  office files. The Company has been
informed by substantially  all of its business  application  software  suppliers
that their software is Year 2000 compliant.  The Company is planning to maintain
additional  physical  records  beginning in the fall of 1999 and continuing into
the first part of 2000 as a safeguard.

         Accordingly, the Company expects that the advent of the millennium will
have only a  minimal  adverse  effect on its  business,  operating  results  and
financial condition, due to additional physical record keeping efforts. However,
there can be no assurances that Year 2000 problems will not occur. The Year 2000
problem may affect other entities with which the Company  transacts  business or
on which students of its golf schools depend, such as airlines and hotels. While
the Company is unable to send questionnaires to each and every airline and hotel
that its  students  may use,  the Company has been  tracking  the ability of the
airline  and hotel  industries  to book  reservations  for the year  2000.  Such
reservations   are  now  being  made.   Published   reports  indicate  that  the
reservations  are being made without  problems.  Accordingly,  while the Company
cannot  predict  the  effect of the Year 2000  problem on such  entities  or its
consequent impact on the Company, management believes that any adverse effect on
the Company will not be material.

ITEM 7.           FINANCIAL STATEMENTS.

         Please refer to the pages beginning with F-1.

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

         Not Applicable.



                                       14

<PAGE>


                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

         The directors and executive  officers of the Company,  their  positions
and ages are as follows:

NAME                           AGE               POSITIONS
William D. Leary               40                President, Treasurer and
                                                 Director
Robert B. Lange                72                Director
John C. Weiner                 70                Director

         The Company's bylaws provide for a Board of Directors ranging from 1 to
9 members,  with the exact number to be  specified  by the Board.  The number is
currently  fixed at 3  directors.  All  directors  hold office  until the annual
meeting  of  stockholders  next  following  their  election,   and  until  their
successors have been elected and qualified.
Officers serve at the discretion of the Board of Directors.

         There are no family  relationships  between any  directors or executive
officers of the Company.  Directors of the Company  receive no  compensation  to
date for their service as directors.  Set forth below are brief  descriptions of
recent  employment  and  business  experience  of  the  Company's  officers  and
directors.

         WILLIAM D. LEARY.  From January 1993 until the present time,  Mr. Leary
has been the President of the Company.  From May 1986 until  January  1993,  Mr.
Leary was the President and CEO of the Innova  Corporation,  a golf distribution
company.  Mr. Leary was employed as a  linebacker  by the Denver  Broncos of the
National  Football  League from May 1983 to December  1984.  From  January  1985
through May 1986,  Mr.  Leary was  rehabilitating  from an injury that ended his
football  career and was employed as a golf teaching  professional in the United
States,  Japan,  Austria and  Switzerland.  Mr. Leary  graduated  with a B.S. in
general education from Mesa College, Grand Junction, Colorado in May 1983.

         ROBERT B. LANGE.  Mr.  Lange has been a director  of the Company  since
1995.  From 1955 to 1972,  Mr. Lange was employed as President  and CEO of Lange
Ski Boot.  Mr.  Lange sold Lange Ski Boot in 1970,  and since that time has been
working as an independent  consultant.  Mr. Lange  graduated with a BA degree in
Economics from Harvard  University in the spring of 1949 and earned his MBA from
SMU in 1951.

         JOHN C.  WEINER.  Mr.  Weiner has been a director of the Company  since
1995.  Since 1982, Mr. Weiner has been Chairman of the Board of JCW Investments,
Inc. and JCW Ventures.  From 1971 to 1982,  Mr. Weiner was founder and President
of Trident Investment  Management,  Inc., a public and private pension and other
investment  account  management  service.  Mr.  Weiner sold  Trident  Investment
Management to Pacific Inland Bancorp in 1982.  From 1956 to 1969, Mr. Weiner was
employed by Moody's Investors Service,  serving as President and Chief Executive
Officer from 1966 until 1969.  Mr. Weiner  studied  engineering  at  Westminster
College and Yale  University  from 1945 to 1946;  received a B.A. in pre-med and
finance  from Ripon  College in 1948;  received a B.S. in finance and  economics
from the  University  of Chicago in 1950;  and studied  finance at  Northwestern
University from 1950 to 1952.

KEY EMPLOYEES AND CONSULTANTS

         In addition to the  foregoing  directors  and  officers,  the following
individuals are key employees of or consultants to the Company.

         CHARLES  "VIC" KLINE.  Mr. Kline is a current and two-time  Director of
the PGA. Mr. Kline is currently on the PGA  Properties  Committee of the PGA. He
is also a five-time  Colorado PGA Section  President and five-time Player

                                       15

<PAGE>


of the Year. Mr. Kline is a past Colorado Open and Rocky Mountain Open champion.
Mr. Kline has agreed to join the Company's Board of Directors upon completion of
the offering.

         DR. ART DICKINSON.  Dr. Dickinson is a past Sports Medicine  Supervisor
of the United States Olympic Team, and is a past  department  head and professor
of exercise  physiology  and  biomechanics  at the  University of Colorado.  His
professional  associations  include:  Past  President,  Rocky  Mountain  Region,
College of Sports Medicine; National Football League.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         No directors,  officers,  or beneficial owners of more than ten percent
of securities of the Company reported to the Company any transactions  involving
the  securities  during the fiscal year ended  December 31,  1998.  Accordingly,
there is no disclosure of any such transactions contained in this report.


ITEM 10.          EXECUTIVE COMPENSATION.

         The  following  table sets forth  information  for the Chief  Executive
Officer ("CEO") of the Company, William D. Leary. No disclosure need be provided
for any  executive  officer,  other than the CEO,  whose total annual salary and
bonus for the last completed fiscal year did not exceed  $100,000.  Accordingly,
no other executive officers of the Company are included in the table.

<TABLE>
<CAPTION>

                                                                                    LONG TERM COMPENSATION
                                        ANNUAL COMPENSATION                      AWARDS               PAYOUTS
                                                                                      SECURITIES
                                                             OTHER      RESTRICTED    UNDERLYING
NAME AND                                                    ANNUAL         STOCK         OP-                        ALL OTHER
PRINCIPAL                                                  COMPEN-       AWARD(S)     TIONS/SARS        LTIP        COMPEN-
POSITION           YEAR       SALARY($)      BONUS($)     SATION ($)        ($)           ($)       PAYOUTS ($)    SATION ($)
<S>                <C>        <C>               <C>           <C>           <C>           <C>           <C>            <C>
William D.         1998       60,000(1)<F1>     -0-           -0-           -0-           -0-           -0-            -0-
Leary              1997          -0-            -0-           -0-           -0-           -0-           -0-            -0-

<FN>
<F1>
(1)      The Company and William D. Leary, an officer and director of the Company, entered into an Employment
         Agreement dated July 1, 1998 (the "Employment Agreement").  The Employment Agreement is for a five-year
         term and provides for salary to Mr. Leary in the amount of $120,000 annually.  As of December 31, 1998, the
         Company had not paid any salary to Mr. Leary.  The compensation due to Mr. Leary, pursuant to the terms of
         the Employment Agreement, of $60,000 has been treated as an accrued expense on the Company's financial
         statements and offset against amounts owed to the Company by Mr. Leary.  See "ITEM 12. CERTAIN
         RELATIONSHIPS AND RELATED TRANSACTIONS."
</FN>
</TABLE>

         The  Company  does not have any  employment  contracts  with any of its
officers or directors, except for Mr. Leary. See "ITEM 12. CERTAIN RELATIONSHIPS
AND RELATED  TRANSACTIONS."  Such  persons are  employed by the Company on an at
will basis,  and the terms and conditions of employment are subject to change by
the Company.  Mr. Leary, the Company's chief executive officer,  was not granted
any stock  options  during the fiscal years ended  December 31, 1998 or 1997. He
had no stock options at December 31, 1998.

         The  Company  does not have any  employment  contracts  with any of its
officers or directors,  except for Mr.  Leary.  Such persons are employed by the
Company on an at will basis,  and the terms and  conditions  of  employment  are
subject to change by the Company.

STOCK OPTION PLANS

         The Company has no stock option plans.


                                       16

<PAGE>



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

         The following table sets forth certain information  regarding ownership
by each officer and director, and all officers and directors as a group, as well
as all persons who own greater than 5% of the Company's  outstanding  shares, as
of June 15, 1999,  and as adjusted to reflect the sale of shares  offered by the
Company  in its  initial  public  offering,  which as of June  22,  1999 had not
closed.  The number of shares shown below  reflects the  conversion  of Series A
Preferred Stock and Series B Preferred Stock into Common Stock .
<TABLE>


                                                                                      Percentage of Shares
                                                                                   Beneficially Owned (2)<F2> (3)<F3>
                                                                         ---------------------------------------------

                                                    Number of Shares             Before                  After
Name of Beneficial Owner (1)<F1>                   Beneficially Owned           Offering                Offering


<S>                                                    <C>                       <C>                     <C>
William D. Leary (4)<F4>......................         1,856,400                 44.0%                   35.6%
Leah Leary (5)<F5>............................           946,200                 22.4%                   18.1%
William Childs (6)<F6>........................           560,000                 13.1%                   10.6%
Louis G. Royston..............................           231,940                  5.5%                    4.4%
Robert B. Lange ..............................           154,000                  3.6%                    2.9%
John C. Weiner (7)<F7>........................           52,500                   1.2%                    1.0%
All executive officers and directors as a
group (3 persons) (7)<F7>(8)<F8>..............         2,062,900                 48.9%                   35.6%
---------------
<FN>
<F1>
(1)  To the  Company's  knowledge,  except as set forth in the footnotes to this
     table and subject to applicable  community property laws, each person named
     in the table has sole  voting  and  investment  power  with  respect to the
     shares set forth  opposite such person's  name.  The address of each of the
     persons in this table is as follows: c/o Proformance Research Organization,
     Inc., 5335 West 48th Avenue, Denver, Colorado 80212.

<F2>
(2)  Where  persons  listed on this  table  have the right to obtain  additional
     shares of Common  Stock  through  the  exercise of  outstanding  options or
     warrants or the  conversion of convertible  securities  within 60 days from
     June 15, 1999, these additional shares are deemed to be outstanding for the
     purpose of computing the  percentage of Common Stock owned by such persons,
     but are not  deemed to be  outstanding  for the  purpose of  computing  the
     percentage  owned by any other person.  Based on 4,220,661 shares of Common
     Stock outstanding as of June 15, 1999, and 5,220,661 shares of Common Stock
     outstanding after the Company's initial public offering.

<F3>
(3)  Assumes no  exercise  of  Placement  Agent's  over-allotment  option in the
     Company's  initial  public  offering.   If  the  over-allotment  option  is
     exercised in full,  the Company will sell an aggregate of 1,150,000  shares
     of Common Stock in its initial public offering.

<F4>
(4)  Includes 50,000 shares owned by Sean Leary and Keenan Leary, minor children
     of William D. Leary and Leah Leary.  Includes  896,200 shares owned by Leah
     Leary,  the wife of William D. Leary.  William D. Leary has voting  control
     over the shares owned by Leah Leary pursuant to a Voting Trust Agreement.

<F5>
(5)  Includes  50,000  shares  owned by Sean  Leary and Keenan  Leary.  Excludes
     910,200  shares  owned by  William  D.  Leary.  William D. Leary has voting
     control  over  shares  owned  by Leah  Leary  pursuant  to a  Voting  Trust
     Agreement.

<F6>
(6)  Includes 70,000 shares issuable upon conversion of a convertible debenture.

<F7>
(7)  Assumes sale of no shares pursuant to the Weiner Subscription Agreement. Up
     to 1,000,000 shares in the Company's  initial public offering could be sold
     pursuant to the Weiner  Subscription  Agreement.  If all shares sold in the
     initial  public  offering  are sold  pursuant  to the  Weiner  Subscription
     Agreement, John C. Weiner would beneficially own 1,052,500 shares, or 20.2%
     of the shares outstanding, after the initial public offering.

                                       17

<PAGE>


<F8>
(8)  Includes 50,000  shares owned  by Sean  Leary and  Keenan Leary and 896,200
     shares owned by Leah Leary.

</FN>
</TABLE>

CHANGES OF CONTROL

         The Company is not aware of any events  which could  result in a change
of control of the Company. In the event that no shares are sold in the Company's
offering  and Mr.  Weiner,  pursuant  to the  terms of the  Weiner  Subscription
Agreement  purchases  the  1,000,000  shares  offered,   John  C.  Weiner  would
beneficially own 1,052,500 shares, or 20.2% of the shares outstanding, after the
offering.


ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         WEINER  SUBSCRIPTION  AGREEMENT.  On July 15, 1998, the Company entered
into a binding Subscription Agreement (the "Weiner Subscription Agreement") with
Proformance  Research  Organization/Weiner,  Inc.  and/or  Vanguard 21st Century
Weiner Inc.  ("PROW").  John C. Weiner is President and the sole  shareholder of
PROW and is a director of the Company. Under the Weiner Subscription  Agreement,
PROW  agreed,  on or  before  the  final  day of the  Company's  initial  public
offering,  to  subscribe  for and  purchase  at $5.00 per Share all  Shares  not
otherwise  subject to subscriptions  accepted by P.R.O. as of such date pursuant
to the initial public offering.

         SHAREHOLDER LOANS. As of December 31, 1998, Greg Blaydes, a shareholder
of the Company,  had advanced $13,048 in general and administrative  expenses to
the Company.

         SPORTS  SOLUTIONS,  INC. ("SSI")  LICENSE.  Dave Bisbee owns 50% of the
capital  stock of SSI and is a key  employee of the  Company.  In exchange for a
minimum  of  $10,000.00  per  year  of SSI  services,  P.R.O.  originally  had a
non-exclusive  Licensing  Agreement with SSI to represent the "Mental  Edge(TM)"
video. Under its current arrangement, the Company purchases the videos as needed
from SSI at a wholesale price and resells them to its customers.

         DAVE BISBEE DISTRIBUTION  AGREEMENT. In addition, to the agreement with
SSI, P.R.O.  has a Distribution  Agreement with Dave Bisbee to sell products and
services  produced by him including,  but not limited to the "Player's  Edge(TM)
Instructional Series" and the Instructor Certification  Workbook/Learning Center
Business Plan for an indefinite  period.  Mr. Bisbee was issued 87,500 shares of
Common  Stock  of  the  Company  in  exchange  for  these  exclusive  world-wide
distribution rights.

         LEARY  EMPLOYMENT  AGREEMENT.  The Company  and  William D.  Leary,  an
officer and director of the Company,  entered into an Employment Agreement dated
July 1, 1998 (the  "Employment  Agreement").  The Employment  Agreement is for a
five-year  term and  provides  for salary to Mr. Leary in the amount of $120,000
annually. Under the Employment Agreement, Mr. Leary is prohibited from competing
with the  Company for a period of one year from the date of  termination  of Mr.
Leary's employment. A state court may determine not to enforce or only partially
enforce this  non-compete  provision.  As of December 31, 1998, the Company owed
Mr. Leary $60,000 in accrued  salary.  The amount  receivable from Mr. Leary has
been offset against this amount owed.


         ADVANCES TO OFFICER. During 1997 and 1998, the Company advanced varying
amounts to William D. Leary,  the  President  of the  Company.  The advances are
unsecured and have no set interest or repayment terms. As indicated in "ITEM 10.
EXECUTIVE  COMPENSATION," Mr. Leary did not receive any compensation during 1997
and was owed $60,000 for  compensation  during 1998.  The Company has offset the
compensation  due to Mr. Leary against amounts owed to the Company by Mr. Leary.
The balance of these  advances at December  31, 1997 was $40,300 and at December
31, 1998 was  $60,165.  These  advances  were made to enable Mr.  Leary to cover
certain personal expenses. This loan shall be repaid by February 16, 2000.


                                       18

<PAGE>


         LOANS MADE BY GREG BLAYDES.  From December 1997 through  February 1998,
Greg Blaydes,  the Director of Corporate  Development for the Company loaned the
Company a total of $108,000.  The loans were originally  evidenced by promissory
notes which bore interest at 10% per annum.  They were later  converted into 12%
bonds, due 2002, which bear interest at 12% per annum and are convertible at the
holder's option into shares of Common Stock at $1.43 per share.

         LOANS  GUARANTEED  BY  WILLIAM D.  LEARY.  From June 15,  1998  through
October  19,  1998,  the  Company  has  borrowed a total of  $290,000  from five
individuals,  one of whom is Louis G.  Royston,  Jr.,  an  employee.  A total of
61,000 shares of Common Stock were issued as  inducements  for making the loans.
As of December 31, 1998, $30,000 was outstanding.  All of the related promissory
notes have been  personally  guaranteed by William D. Leary and bear interest at
10% per annum. In the event of default by the Company,  the debt defaults to Mr.
Leary,  who then has 90 days to remit the  balance.  The Company  has  allocated
proceeds from its initial public offering to pay these loans.

         The Company  believes  that with the  exception of the advances made to
Mr. Leary, the terms of the above-described  transactions were no less favorable
to the Company than would have been  obtained from a  nonaffiliated  third party
for similar consideration.  However, the Company lacked sufficient disinterested
independent  directors  to  ratify  all of the  transactions  at  the  time  the
transactions  were initiated.  All ongoing and future  transactions  between the
Company and officers,  directors or 5% shareholders will be made or entered into
on terms  that are no less  favorable  to the  Company  than  those  that can be
obtained from unaffiliated third parties,  and all such transactions  (including
forgiveness  of any loans) will be  approved  by a majority  of the  independent
members of the  Company's  board of directors who do not have an interest in the
transactions  and who have access,  at the Company's  expense,  to the Company's
independent legal counsel.  The Company has agreed with certain state regulatory
authorities  that so long as the  Company's  securities  are  registered in such
states,  or one year  from the date the  Company's  Prospectus  for its  initial
public  offering,  whichever  is longer,  the Company will not make loans to its
officers, directors, employees, or principal shareholders, except for loans made
in the ordinary  course of business,  such as travel  advances,  expense account
advances, relocation advances, or reasonable salary advances.


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

<TABLE>

(a)      Exhibits:
<CAPTION>

    REGULATION                                                                                        CONSECUTIVE
    S-B NUMBER                                         EXHIBIT                                        PAGE NUMBER

      <S>                  <C>                                                                            <C>
       3.1                 Amended and Restated Certificate of Incorporation (1)<F1>                      N/A
       3.2                 Bylaws (1)<F1>                                                                 N/A
       4.1                 Reference is made to Exhibits 3.1 and 3.2 (1)<F1>                              N/A
      10.1                 Distribution Agreement between the Company and Dave Bisbee, dated              N/A
                           August 22, 1996 (1)<F1>
      10.2                 Distribution Agreement between the Company and William D. Leary (1)<F1>        N/A
      10.3                 Lease between Fernal Inc. and William D. Leary and the Company, dated          N/A
                           May 1, 1997, as amended by an Addendum to Lease between Mach One
                           and World Associates, Inc. dated April 4, 1998 (1)<F1>
      10.4                 Common Stock Purchase Agreement with Proformance Research                      N/A
                           Organization/Weiner, Inc. dated July 15, 1998 (1)<F1>
      10.5                 Sublease dated April 21, 1998 between Mach One Corporation and                 N/A
                           Proformance Research Organization, Inc. (1)<F1>

                                       19

<PAGE>

<CAPTION>

    REGULATION                                                                                        CONSECUTIVE
    S-B NUMBER                                         EXHIBIT                                        PAGE NUMBER

      <S>                  <C>                                                                            <C>
      10.6                 Employment Agreement between the Company and William D. Leary                  N/A
                           dated July 1, 1998 (1)
      10.7                 Consulting Services Agreement between Sunkyong U.S.A., Inc. and the            N/A
                           Company dated May 6, 1997 (1)
      10.8                 Distribution Agreement between Renaissance Golf Products Inc. and the          N/A
                           Company dated July 21, 1998 (1)
      10.9                 Amendment to Common Stock Purchase Agreement with Proformance                  N/A
                           Research Organization/Weiner, Inc. dated November 2, 1998 (1)
     10.10                 Form of Stock Escrow Agreement (1)                                             N/A
      27                   Financial Data Schedule                                                         39
----------------------------
<FN>
<F1>
(1)      Incorporated  by reference to the exhibits filed with the  Registration
         Statement on Form SB-2, File No. 333- 61533.

</FN>
</TABLE>


(b)      The following reports on Form 8-K were filed during the last quarter of
         the period covered by this report: NONE.



                                       20

<PAGE>



                                   SIGNATURES

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

                                         PROFORMANCE RESEARCH ORGANIZATION, INC.



Dated: June 24, 1999                     By: /S/ WILLIAM D. LEARY
                                         ---------------------------------------
                                             William D. Leary, President

         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.

<TABLE>
<CAPTION>
SIGNATURE                                            TITLE                                       DATE
<S>                                                  <C>                                         <C>
                                                     President, Treasurer and Director
                                                     (Principal Executive, Financial and
/s/ William D. Leary                                 Accounting Officer)                         June 24, 1999
------------------------------------------------                                                 --------------------

William D. Leary


/s/ Robert B. Lange                                  Director                                    June 24, 1999
------------------------------------------------                                                 --------------------

Robert B. Lange

                                                     Director

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

John C. Weiner

</TABLE>

                                       21

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS



Shareholders and Board of Directors
  Proformance Research Organization, Inc.

We  have  audited  the  accompanying   balance  sheet  of  Proformance  Research
Organization,  Inc. (fka World Associates Inc.) as of December 31, 1998, and the
related statements of operations,  stockholders' deficiency,  and cash flows for
the years ended December 31, 1998 and 1997.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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  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 financial  statements  referred to above present fairly, in
all  material  respects,   the  financial   position  of  Proformance   Research
Organization,  Inc. (fka World Associates Inc.) as of December 31, 1998, and the
results of its  operations,  and its cash flows for the years ended December 31,
1998 and 1997, in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
company will continue as a going concern.

As  shown  in the  financial  statements,  the  company  incurred  a net loss of
$2,133,279 for 1998 and has incurred substantial net losses for each of the past
five years. At December 31, 1998,  current  liabilities exceed current assets by
$1,663,880  and total  liabilities  exceed  total  assets by  $1,786,624.  These
factors, and the others discussed in Note "Continuing Losses,  Deficit in Equity
and Negative  Working  Capital",  raise  substantial  doubt about the  company's
ability to continue as a going concern.  The financial statements do not include
any adjustments  relating to the  recoverability  and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the company cannot continue in existence.



/s/Stark Tinter & Associates, LLC
Stark Tinter & Associates, LLC
Englewood, Colorado
May 25, 1999




<PAGE>




                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                                  Balance Sheet
                                December 31, 1998

                                     ASSETS
Current assets
   Cash                                                     $   4,770
   Due from employees                                           6,209
   Note receivable                                             18,000
   Deferred financing costs                                    96,653
                                                           -----------
       Total current assets                                   125,632

Property and equipment - net of accumulated depreciation       68,482
Deferred offering costs                                        34,626
Other assets                                                    4,663
                                                           -----------

                                                            $ 233,403
                                                           ===========

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
   Accounts payable and accrued expenses                    $ 484,970
   Current portion of long term debt                            7,077
   Related party payable                                       18,524
   Notes and bonds payable                                    265,000
   Notes and bonds payable, related party                     768,500
   Deferred revenue and deposits payable                      245,441
                                                           -----------
       Total current liabilities                            1,789,512
                                                           -----------

Long term debt
   Notes and bonds payable                                     29,413
   Bonds payable, related party                               160,000
                                                           -----------
      Total Long term debt                                    189,413
                                                           -----------

Other non-current liabilities
   Net liabilities of discontinued operations                  41,102
                                                           -----------

Commitments and contingencies

Stockholders' deficiency
   Preferred  stock,  Series  A, convertible,
     cumulative,  no  stated  value,
     1,000,000 shares authorized, 857,850
     shares issued and outstanding                          1,225,500
   Preferred  stock,  Series  B,  convertible,
     cumulative,  no  stated  value,
     1,000,000 shares authorized, 648,200 issued
     and outstanding                                          212,800
   Common stock, no par value, 10,000,000 shares
     authorized, 2,650,810 shares,
     issued and outstanding                                   278,978
   Accumulated deficit                                     (3,503,902)
                                                           -----------
       Total stockholders' deficiency                      (1,786,624)
                                                           -----------

                                                            $ 233,403
                                                           ===========

                See accompanying notes to financial statements.

                                       F-2
<PAGE>

<TABLE>
<CAPTION>

                            Proformance Research Organization, Inc.
                                  (fka World Associates Inc.)
                                    Statements of Operations
                         For the years ended December 31, 1998 and 1997

                                                                      1998             1997
                                                                ----------------   -------------
<S>                                                             <C>                <C>
Revenue                                                         $       189,740    $    119,072
Cost of revenues                                                        353,268          95,545
                                                                ----------------   -------------
Gross (loss) profit                                                    (163,528)         23,527
                                                                ----------------   -------------

Operating expenses
  Sales, general and administrative                                   1,879,183         678,214
  Depreciation                                                            8,810           3,616
                                                                ----------------   -------------
    Total operating expenses                                          1,887,993         681,830
                                                                ----------------   -------------

Operating (loss)                                                     (2,051,521)       (658,303)

Interest expense                                                         78,695          31,632
                                                                ----------------   -------------

(Loss) from continuing operations                                    (2,130,216)       (689,935)

Discontinued operations
  (Loss) from operations of Team Family segment,
    estimated to be disposed of on or before
    December 31, 1999                                                    (3,063)         (3,063)
                                                                ----------------   -------------

Net (Loss)                                                      $    (2,133,279)   $   (692,998)
                                                                ================   =============

Per share information
   Weighted average shares outstanding                                  939,287         868,188
                                                                ================   =============
   (Loss) per common share
     (Loss) from continuing operations                          $         (2.27)   $      (0.80)
     (Loss) from discontinued operations                                    NIL             NIL
                                                                ----------------   -------------
 Net (loss) per common share                                    $         (2.27)   $      (0.80)
                                                                ================   =============
</TABLE>


                                       F-3

                 See accompanying notes to financial statements.

<PAGE>

<TABLE>
                     Proformance Research Organization, Inc.
                          (fka World Associates Inc.)
                     Statements of Stockholders' Deficiency
                 For the years ended December 31, 1998 and 1997
<CAPTION>

                                                            Preferred Stock        Preferred Stock
                                     Common Stock              Series A                Series B
                                 --------------------   -----------------------    ------------------     Accumulated
                                   Shares     Amount     Shares        Amount      Shares     Amount        Deficit       Total
                                 ---------   --------   -------      ----------    -------   --------     ------------ ------------
<S>                              <C>         <C>        <C>          <C>           <C>       <C>          <C>          <C>
Balance at January 1, 1997         890,693   $ 82,029    31,000      $  155,000    135,000   $150,050       $(677,625)   $(290,546)

Bonds converted to stock                                 20,800         104,000     20,000     25,000                      129,000

Issuance of stock for cash                               63,850         319,250     30,200     37,750                      357,000

Stock issued in consideration
  for loans received                 1,071         11                                                                           11

Stock issued in consideration
  for services rendered              5,500         55     1,250           6,250                                              6,305

Net (Loss) for 1997                                                                                           (692,998)   (692,998)
                                 ---------   --------   -------      ----------    -------   --------     ------------ ------------
Balance at December 31, 1997       897,534     82,095   116,900         584,500    185,200    212,800     (1,370,623)    (491,228)

Issuance of stock for cash
  at $5.00  per share                                    96,300         481,500                                            481,500


Stock issued in consideration
  for loans received at
  $4.00 per share                   12,500     50,000                                                                       50,000

Conversion of shares upon
  the Company's merge into
  its wholly owned subsidiary    1,638,061              533,000                    463,000                                      -

Issuance of stock for cash
  at $1.43 per share                                     41,650          59,500                                             59,500

Debt converted to stock
  at $1.43 per share                                     70,000         100,000                                            100,000

Stock issued in consideration
  for loans received at
  $1.43 per share                  100,213    143,305                                                                      143,305

Stock issued in consideration
  for services rendered at
  $1.43 per share                    2,502      3,578                                                                        3,578

Net (Loss) for 1998                                                                                        (2,133,279)  (2,133,279)
                                 ---------   --------   -------      ----------    -------   --------     ------------ ------------
Balance at December 31, 1998     2,650,810   $278,978   857,850      $1,225,500    648,200   $212,800     $(3,503,902) $(1,786,624)
                                 =========   ========   =======      ==========    =======   ========     ============ ============

</TABLE>


                 See accompanying notes to financial statements.

                                       F-4


<PAGE>

<TABLE>
<CAPTION>


                             Proformance Research Organization, Inc.
                                   (fka World Associates Inc.)
                                    Statements of Cash Flows
                         For the years ended December 31, 1998 and 1997


                                                                     1998               1997
                                                               -----------------   --------------
<S>                                                            <C>                 <C>
Cash flows from operating activities:
Net (loss)                                                     $     (2,133,279)   $    (692,998)
Adjustments to reconcile net loss
 to net cash (used in) operating
 activities:
   Depreciation and amortization                                          8,810            3,616
Changes in assets and liabilities:
  (Increase) in due from employees                                       (6,209)             -
  (Increase) in note receivable                                         (18,000)             -
  (Increase) in deferred offering costs                                 (34,626)             -
  (Increase) in due from officer                                            -            (37,796)
  Decrease in prepaid expenses                                              -              4,299
  Decrease (increase) in other assets                                       505           (1,855)
  Increase in accounts payable and accrued expenses                     340,761          125,161
  Increase (decrease) in related party payable                           18,524           (1,364)
  Increase in deferred revenue and deposits payable                     234,330           11,111
  (Decrease) in liabilities of discontinued operations                  (14,038)         (17,836)
      Total adjustments                                                 530,057           85,336
                                                               -----------------   --------------
      Net cash (used in) operating activities                        (1,603,222)        (607,662)
                                                               -----------------   --------------

Cash flows from investing activities:
  Purchase of fixed assets                                              (59,411)         (10,288)
                                                               -----------------   --------------
     Net cash (used in) investing activities                            (59,411)         (10,288)
                                                               -----------------   --------------

Cash flows from financing activities:
  Proceeds from notes and bonds payable, related party                1,035,500           65,000
  Payment on notes and bonds payable, related party                    (407,000)             -
  Common stock issued for inducements                                    96,653              -
  Net proceeds from issuance of common stock                                -                 65
  Net proceeds from issuance of preferred stock series A                641,000          429,500
  Net proceeds from issuance of preferred stock series B                    -             62,750
  Proceeds from note and bonds payable                                  299,166           60,081
  Payments on note and bonds payable                                     (2,677)             -
                                                               -----------------   --------------
     Net cash provided by financing activities                        1,662,642          617,396
                                                               -----------------   --------------

Net increase (decrease) in cash                                               9             (554)

Beginning - cash                                                          4,761            5,315
                                                               -----------------   --------------

Ending - cash                                                  $          4,770    $       4,761
                                                               =================   ==============

</TABLE>

                See accompanying notes to financial statements.

                                       F-5

<PAGE>



<TABLE>
<CAPTION>

                                      Proformance Research Organization, Inc.
                                            (fka World Associates Inc.)
                                        Statement of Cash Flows (continued)
                                   For the years ended December 31, 1998 and 1997


Supplemental Cash Flow Information:
                                                                                      1998                1997
                                                                                ----------------    ----------------
<S>                                                                             <C>                 <C>
 Non-cash Financing activities excluded above-
  Preferred Stock, Series A issued for consulting services                                   -                 6,000
  Common Stock issued for consulting services                                              3,578               2,320
  Common Stock issued as an inducement for notes payable                                 193,305                  25
  Preferred Stock, Series A issued for bonds payable converted                               -               104,000
  Preferred Stock, Series B issued for bonds payable converted                               -                25,000
  Notes payable, stockholder converted to bonds payable, stockholder                         -                50,000

</TABLE>






















                See accompanying notest to financial statements.

                                       F-6

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements




SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The  Company  was  incorporated  in 1993 in  Colorado  under  the  name of World
Associates,  Inc.  The  accompanying  financial  statements  for the year  ended
December  31,  1997  include the  accounts  of the Company and its wholly  owned
subsidiary   Proformance  Research   Organization,   Inc.  ("PRO"),  a  Delaware
corporation.  All significant  inter-company accounts and transactions have been
eliminated.  On July 31, 1998,  the Company  merged into PRO, with PRO surviving
(see "Merger"),  accordingly,  these financial  statements are not  consolidated
after that date.

The Company  conducts  destination  golf schools by  contracting  with  existing
facilities to provide  instruction.  The Company also earns annual  license fees
from distributors in exchange for certain non-exclusive rights.

Revenue recognition

Revenues are recognized in the period when the customer attends the golf school.
Revenues   collected  in  advance  of  attendance  are  deferred.   Selling  and
promotional  expenses are charged to expense as  incurred.  Revenue from license
fees collected pursuant to distributor  agreements is deferred until the Company
fulfills all requirements of the agreement.

Depreciation

The cost of equipment is depreciated  over the estimated  useful lives (5 years)
of the related assets.  Depreciation is computed on the straight-line method for
financial reporting purposes.

Use of estimates

The  preparation  of the  Company's  financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and  assumptions  the affect the reported  amounts of assets and liabilities and
disclosure of contingent  assets and  liabilities  at the balance sheet date and
the reported amounts of revenues and expenses during the reporting periods.

The  Company  attempts  to  make  reasonably  dependable   estimates.   However,
uncertainties  inherent in the estimation  process,  actual results could differ
from those estimates.

Net loss per share

The net loss per share  amounts  are  based on the  weighted  average  number of
common  shares  outstanding  for the  period.  Potential  common  shares and the
computation  of diluted  earnings per share are not  considered  as their effect
would be anti-dilutive.


                                       F-7

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Comprehensive loss

There were no items of comprehensive  loss for the years ended December 31, 1998
and 1997, and thus net loss is equal to comprehensive loss for those years.

Reclassifications

Certain  amounts in the 1997  financial  statements  have been  reclassified  to
conform to the 1998 presentation.  Such  reclassifications  had no effect on net
loss as previously reported.

Product Concentration

The  Company  currently  derives  most of its  revenues  from  destination  golf
schools.  The Company  expects that these  revenues will continue to account for
substantially  all of the Company's  revenues for the foreseeable  future.  As a
result,  the Company's  future  operating  results are dependent  upon continued
market  acceptance of destination golf schools and enhancements  thereto.  There
can be no  assurance  that these golf  schools  will  achieve  continued  market
acceptance.  A decline in demand for, or market acceptance of,  destination golf
schools as a result of competition,  technological change or other factors could
have a material adverse effect on the Company's business,  operating results and
financial condition.

Fair value

Fair value estimates  discussed herein are based upon certain market assumptions
and pertinent  information  available to management as of December 31, 1998. The
respective  carrying value of certain  on-balance-  sheet financial  instruments
approximate their fair values.  These financial  instruments include cash, notes
receivable,  amounts due from and payable to related parties,  accounts payable,
accrued  expenses and notes and bonds payable.  Fair values for their  financial
instruments  were assumed to  approximate  carrying  values for these  financial
instruments  because  they are  short  term in  nature.  The  fair  value of the
Company's  long-term  debt  approximate  its carrying value based on the current
rates offered to the Company for debt of the same remaining maturities.


                                       F-8

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at cost,  less  accumulated
depreciation at December 31, 1998:

                  Furniture and fixtures                                $31,429
                  Leasehold improvements                                  2,353
                  Equipment                                              23,413
                  Vehicle                                                32,313
                                                                       --------
                                                                         89,508
                  Less: Accumulated depreciation                         21,026
                                                                       --------
                           Total                                        $68,482
                                                                       ========

For the years ended December 31, 1998 and 1997,  depreciation expense charged to
operations was $8,810 and $3,616, respectively.


MERGER

On July 31,  1998,  the  Company  merged  into  PRO,  its  subsidiary,  with PRO
surviving.  On that date,  each issued and  outstanding  share of the  Company's
Series A Convertible  Preferred  Stock was converted into 3.5 shares of Series A
stock of PRO. Also, each issued and outstanding  share of the Company's Series B
Convertible  Preferred  Stock was converted  into 3.5 shares of Series B of PRO.
The Company's issued and outstanding Common Stock were converted into 2.8 shares
common stock of PRO. The currently issued and outstanding  shares of PRO held by
the Company were cancelled at the effective time of merger.


LEASE OBLIGATION

The Company leases office space under an operating lease  arrangement for $2,500
per month. The lease expires on September 30, 1999.

Minimum  future  lease  payments  required  as of  December  31, 1998 under this
non-cancelable operating lease is $30,000.

For the  years  ended  December  31,  1998 and  1997,  the  amounts  charged  to
operations for rent expense were $54,086 and $29,088, respectively.


RELATED PARTY TRANSACTIONS

During  1998,  the Company  advanced  various  amounts to the  president  of the
Company.  The balance of the advances at December  31, 1998 was  $60,165.  These
advances are not collateralized and have no set interest or repayment terms.


                                       F-9

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


RELATED PARTY TRANSACTIONS (CONTINUED)

The Company  entered into an employment  agreement for the position of President
and Chief Executive  Officer on July 1, 1998. The agreement has a five-year term
which expires on June 30, 2003. The base  compensation  is a minimum of $120,000
per year to be paid on the first and fifteenth of each month. In addition to the
base compensation  incentive compensation will be determined by the Compensation
Committee  of the Board of Directors  and begins on January 1, 1999.  During the
term of employment  and in the event of  termination  of employment the employee
cannot  directly or indirectly  own or manage a similar  business  within a four
hundred-mile  radius.  As of  December  31,  1998 the  Company  has not paid any
salaries to this employee, therefore there is an accrued expense of $60,000. The
amount receivable from this officer has been offset against amounts owed.

As of December 31, 1998,  the Company owes to a  shareholder  $13,048 in general
and  administrative  expenses  paid  for by the  shareholder  on  behalf  of the
Company.

On November 2, 1998 the Company entered into a Common Stock Purchase  Agreement.
The agreement provides that the investor will purchase a number of shares of the
Company's common stock equal to the number of common shares not purchased in the
Registration  Statement on Form SB-2 filed under the Securities Act of 1933 (see
"Subsequent Events").


NOTES AND BONDS PAYABLE

         The following is a summary of notes payable at December 31, 1998:

                  SHORT-TERM:

                  8% promissory  notes payable,
                  principal and interest due July
                  15,  1999,   warrant   inducements
                  (see  "Stock   Warrants"), unsecured           $ 250,000

                  10% promissory note payable,
                  principal and interest due July 4,
                  1999, unsecured                                   10,000

                  12% convertible bonds payable,
                  interest payable semi-annually
                  (in   default),   convertible
                  at  any  time  into  Series  A
                  Convertible  Preferred Stock at
                  rate of $5 per share, annually
                  redeemable on the anniversary date
                  of issuance at the holders option,
                  unsecured                                          5,000
                                                                 ---------
                                                                 $ 265,000
                                                                 =========

                                      F-10

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


NOTES AND BONDS PAYABLE (CONTINUED)

         The  following  is a summary of notes  payable  at  December  31,  1998
(continued):

                  SHORT-TERM, RELATED PARTY:

                  12%  convertible  bonds  payable
                  to  stockholders,   interest payable
                  semi-annually  (currently in default),
                  convertible at any time into Series A
                  Convertible  Preferred Stock at rate
                  of $5 per share,  annually  redeemable
                  on the anniversary date of issuance at
                  the holders option, unsecured                  $ 175,000

                  8%  promissory  notes payable to
                  stockholders,  principal and interest
                  due within  five  business  days of
                  first  available proceeds from the
                  Company's public offering,  common
                  stock and warrants inducements
                  (see "Subsequent Events",
                  "Stockholders' Equity" and "Stock
                  Warrants"), unsecured                            390,000

                  10% promissory  notes payable to
                  stockholders,  principal and interest
                  due within  five  business  days of
                  first  available proceeds from the
                  Company's public offering, stock
                  inducements (see "Stockholders'
                  Equity"), unsecured                              185,000

                  10%  promissory  notes  payable
                  to  employee,  principal  and interest
                  due  April  30,  1999 and July 31,
                  1999,  unsecured                                  18,500
                                                                 ---------
                                                                 $ 768,500
                                                                 =========





                                      F-11

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


NOTES AND BONDS PAYABLE (CONTINUED)

              The  following is a summary of notes  payable at December 31, 1998
(continued):

                  LONG-TERM:

                  8.90% note  payable,  principal and
                  interest of $744 due in 42 monthly
                  installments beginning August 1998,
                  collateralized by vehicle                       $ 23,990

                  12% convertible bonds payable,
                  interest payable semi-annually (in
                  default),   convertible   at  any  time
                  into  Series  A Convertible  Preferred
                  Stock at rate of $5 per share, annually
                  redeemable on the anniversary date of
                  issuance at the holders option, unsecured         12,500
                                                                  --------
                                                                    36,490
                                  Less current portion               7,077
                                                                  --------
                                                                  $ 29,413
                                                                  ========

                  LONG-TERM, RELATED PARTY:

                  12%  convertible  bonds  payable  to
                  stockholders,   interest payable semi-
                  annually  (currently in default),
                  convertible at any time into Series A
                  Convertible  Preferred Stock at rate of
                  $5 per share,  annually  redeemable on
                  the anniversary date of issuance at the
                  holders option, unsecured                      $ 160,000
                                                                 =========


DEFERRED REVENUE AND DEPOSITS PAYABLE

During 1998, the Company  entered into a number of  distributorship  agreements.
These agreements required that the distributor pay to the Company an agreed upon
annual  license  fee in  exchange  for a  non-exclusive  right to sell  products
created by or manufactured  for the Company in a designated  territory,  as well
as, training,  materials and two-days of sales assistance. The Company collected
deposits of license fees in the amount of $115,000, however, recognition of this
revenue was deferred as all of the  requirements  of the  agreement had not been
fulfilled as of December 31, 1998.



                                      F-12

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


STOCKHOLDERS' EQUITY

During 1997, the Company issued 1,071 shares of Common Stock as inducements  for
loan funds  received.  Also,  during  1997,  the Company  issued 5,500 shares of
Common Stock and 1,250 shares of Series A Convertible  Preferred  Stock ("Series
A") in exchange for consulting  services rendered.  The cost of the services has
been charged to  operations.Prior  to the Company's merger into its wholly owned
subsidiary (see "Merger"), the Company issued 96,300 shares of Series A at $5.00
per share for cash of  $481,500.Also  prior to the merger,  the  Company  issued
12,500 shares of Common Stock for $4.00 per share as inducements  for loan funds
received.Upon  the merger  taking  place on July 31,  1998 (see  "Merger"),  the
Company issued 1,638,061 shares of Common Stock,  533,000 shares of Series A and
463,000 of Series B Convertible  Preferred Stock ("Series  B").During  1998, the
Company  issued  41,650  shares of Series A at $1.43 for cash of  $59,500.  Also
during 1998, the Company  converted  $100,000 in debt to 70,000 shares of Series
A.

The Company  also issued  100,213  shares of Common  Stock at $1.43 per share as
inducements for loan funds received.

In addition  during  1998,  the Company  issued  2,502 shares of Common Stock at
$1.43 per share for consulting  services rendered.  The cost of the services has
been  charged to  operations  and  stockholders'  equity has been  increased  by
$3,578.

The  Company's  Series A and Series B have no voting  rights and pay  cumulative
dividends at the rate of 0.000492%  per share of the Company's  pre-tax  profits
until such time as the holder shall have received $5 per share. Thereafter,  the
dividend rate is 0.00005% of the Company's pre-tax profits.  The dividend on the
Series B stock  shall be junior in  preference  to the  dividend  payable on the
Series A stock and no  dividends  shall be paid on the Series B stock  until the
dividend  payable on the Series A stock shall have been  declared  and paid or a
sum  sufficient  for  payment  thereof set apart.  There have been no  dividends
accrued for 1998 or 1997.

Series A stock and Series B stock is convertible  into one share of common stock
at any time at the option of the  holder  after the date of  issuance.  Series A
stock will be automatically converted into one share of common stock in February
1999, when the Company's offering document became effective.


                                      F-13

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


STOCK WARRANTS

As a loan  inducement the Company has granted  Common Stock Warrants  during the
year ended 1998,  at a rate of one warrant for each five dollars  invested.  The
exercise  price of each  warrant is $6.00 per  share.  The  maximum  term of the
warrant is five years. All of 123,000 warrants granted are fully vested.

The  Company  applies APB Opinion 25 in  accounting  for the stock  compensation
plan. No  compensation  cost has been recognized for the year ended December 31,
1998. Had the Company elected to account for stock based  compensation  pursuant
to SFAS No. 123 "Accounting for Stock Based  Compensation" net loss and earnings
per share  would have been  reduced as follows for the year ended  December  31,
1998:

                                            AS REPORTED         PRO FORMA
         Net  loss                          ($2,133,279)        ($2,168,452)
                                            ============        ============

         Basic earnings per share           ($2.27)             ($2.31)
                                            =======             =======

For pro forma disclosures,  the options' estimated fair value was amortized over
their  expected 5 year life.  The fair value for these  options was estimated at
the date of grant using an option pricing model. The model requires the input of
highly subjective  assumptions.  In management's opinion, the existing models do
not  provide  a  reliable  single  measure  of the value of stock  options.  The
following  weighted average  assumptions were used to estimate the fair value of
these options:  expected price volatility 352.85%,  risk free interest rate 4.8%
and expected life of options 5 years.

Following  is a summary of the  status of the  options  during the period  ended
December 31, 1998:
<TABLE>
<CAPTION>

                                                                                          Weighted
                                                                                          Average
                                                             Number of                    Exercise
                                                               Shares                       Price
                                                             --------                     ---------
<S>                                                          <C>                          <C>
Outstanding at January 1, 1998                                   -                            -

         Granted                                              123,000                       $6.00
         Exercised                                               -                            -
         Forfeited                                               -                            -

Outstanding at December 31, 1998                              123,000                       $6.00
                                                              =======                     =======

Options exercisable at December 31, 1998                      123,000
                                                              =======

Weighted average fair value of options
 granted during year                                          $1.43
                                                              =====

</TABLE>


                                      F-14

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


STOCK WARRANTS (CONTINUED)

The status of all options  outstanding  at December 31, 1998 is 123,000  options
with an exercise price of $6.00, a weighted average  remaining  contractual life
of 5 years and a weighted  average exercise price of $6.00. All of these options
are  exercisable  at December 31, 1998 at a weighted  average  exercise price of
$6.00.


DISCONTINUED OPERATIONS

On December 31, 1996,  the company  adopted a formal plan to dispose of the Team
Family segment of the business,  a system of parenting and family development on
videotape  and in a booklet.  As of December  31, 1998 the  disposal has not yet
been completed.

Net  liabilities  of  discontinued  operations  consisted  of the  following  at
December 31, 1998:

                  Accounts payable                    $    934
                  Due to distributors                    7,300
                  Short-term note payable               32,868
                                                      --------
                                                      $ 41,102
                                                      ========

DESTINATION GOLF SCHOOL AGREEMENTS

The Company  has  agreements  with golf  courses  located in Arizona,  Colorado,
Florida and Nevada.  In exchange for $110,000 in annual  license fee expense and
other  miscellaneous  fees varying from course to course,  the Company  received
supplies,  storage  and access to golf  facilities.  The  Company's  golf school
revenues are generated  from schools  taught at these  locations and these costs
are included in cost of revenues on the income statement.


DEFERRED FINANCING COSTS

During the year  ended  December  31,  1998,  the  Company  recorded  $96,653 in
deferred  financing costs as an offset to the common stock issued as inducements
for loan funds received (see "Stockholders'  Equity").  One half of the deferred
financing  costs were expensed in 1998 and the remaining  costs will be expensed
in 1999 in conjunction  with the completion of the Initial Public  Offering (see
"Subsequent Events" ).


DEFERRED OFFERING COSTS

During the year  ended  December  31,  1998,  the  Company  incurred  $34,626 in
professional fees which relate directly to the initial public offering currently
in process.


                                      F-15

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


YEAR 2000 COMPLIANCE

The Company  has  assessed  its  exposure to date  sensitive  computer  software
programs  that may not be operative  subsequent  to 1999 and has  implemented  a
requisite  course of action to minimize  Year 2000 risk and ensure that  neither
significant costs nor disruption of normal business  operations are encountered.
However,  because there is no guarantee  that all systems of outside  vendors or
other entities  affecting the Company's  operations will be 2000 compliant,  the
Company remains susceptible to consequences of the Year 2000 issue.


INCOME TAXES

Deferred income taxes may arise from temporary differences resulting from income
and  expense  items  reported  for  financial  accounting  and tax  purposes  in
different  periods.  Deferred  taxes are  classified as current or  non-current,
depending on the  classifications  of the assets and  liabilities  to which they
relate.  Deferred taxes arising from temporary  differences that are not related
to an asset or liability are classified as current or  non-current  depending on
the periods in which the temporary differences are expected to reverse.

The net operating  loss  carryforward  as of December 31, 1998 is  approximately
$3,500,000,  which will expire  through  year 2018.  The tax benefit of the loss
carryforward  has been offset by a valuation  allowance of the same amount.  The
expected tax benefit that would result from applying federal statutory tax rates
to the pre-tax loss differs from amounts  reported in the  financial  statements
because of the increase in the valuation allowance.


CONTINUING LOSSES, DEFICIT IN EQUITY AND NEGATIVE WORKING CAPITAL

The  financial  statements  have been  prepared  in  conformity  with  generally
accepted accounting principles,  which contemplates  continuation of the company
as a going concern.  However,  the Company has sustained  substantial  operating
losses in recent years. In addition, the Company has used substantial amounts of
working  capital in its  operations.  Further,  at December  31,  1998,  current
liabilities  exceeded current assets by $1,663,880 and total liabilities  exceed
total assets by $1,786,624.

These  circumstances  raise  substantial  doubt about the  Company's  ability to
continue as a going concern.  The ability of the Company to continue  operations
as a going  concern is dependent  upon its success in (1)  obtaining  additional
capital;  (2)  paying  its  obligations  timely;  and (3)  ultimately  achieving
profitable  operations.  The financial statements do not include any adjustments
which might result from the outcome of these uncertainties.

The Company is in the process of completing an offering of common stock for sale
in a  Public  Offering  (see  "Subsequent  Events").  Management  believes  this
offering will provide the opportunity to obtain additional capital.


                                      F-16

<PAGE>


                     Proformance Research Organization, Inc.
                           (fka World Associates Inc.)
                          Notes to Financial Statements
                                   (continued)


SUBSEQUENT EVENTS

The Company is in the Process of offering  for sale  1,000,000  shares of common
stock  in a  registered  public  offering  at a price of $5.00  per  share.  The
offering  was  deemed  effective  in  February  1999 and is being sold on a best
efforts,  all or none basis.  Upon  successful  completion  of the  offering the
Company anticipates receiving approximately $4,250,000 in net proceeds.

Series A and  Series B stock  converted  to  Common  Stock at a 1:1 ratio at the
effective date of this offering.



                                      F-17

<PAGE>



                                   Exhibit 27

                             Financial Data Schedule

                                       28

<PAGE>