UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                   For the fiscal year ended January 31, 2000

                        Commission File Number 333-89941

                                FUSION FUND, INC.
             ------------------------------------------------------

             (Exact name of registrant as specified in its charter)




        Delaware                                        65-0648808
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)


                        1 World Trade Center, Suite 7967
                               New York, NY 10048
               (Address of principal executive offices) (Zip Code)

                                 (212) 775-7020
              (Registrant's telephone number, including area code)

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

                     Common Stock, par value $0.01 per share
                                (Title of Class)

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ X]

     The Company's net revenues from its  discontinued  operations  for the year
ended January 31, 2000 were $88,474.

     As of April 30, 2000 the aggregate market value of the voting stock held by
non-affiliates  of the  registrant  (based  on The Over the  Counter  Electronic
Bulletin Board's last sale price of $10.00 on April 30, 2000) was $57,021,310.

     As of April 30,  2000,  there  were  5,702,131  shares of the  registrant's
common stock outstanding.


<PAGE>
                                     PART I.

Item 1.  DESCRIPTION OF BUSINESS

History of the Company

     The  Company  was  founded as Hippo,  Inc.,  a golf  equipment  and apparel
manufacturer,  in  February  1996.  In July 1997,  the  Company  entered  into a
licensing agreement with Hippo Holdings,  Ltd., a leading European  manufacturer
of value-priced golf equipment, to manufacture,  market and distribute the HiPPO
brand of golf  equipment in the United States and Canada.  In January 1998,  the
Company  changed  its name to Outlook  Sports  Technology,  Inc.  to reflect the
Company's widening research and development operations. In May 1998, the Company
sold its license to sell HiPPO-TM-  products in the U.S. back to Hippo Holdings,
Ltd.  along with its  existing  HiPPO-TM-  inventory,  marketing  materials  and
related liabilities.  That same month, the Company discontinued its distribution
of  value-priced  golf and focused its efforts on the sale of proprietary  Tegra
brand premium grade golf products.

     In the  first  three  months  of  the  year  2000,  the  Company  underwent
significant  management changes and redirected its business mission.  On January
11,  2000,  Paul H.  Berger  resigned  from his  positions  as  Chairman  of the
Company's  Board of Directors and  Treasurer  and Jim Dodrill  resigned from his
positions as President,  General Counsel,  and Director of the Company.  After a
brief  restructuring  period,  Mae Davis Group, an investment banking firm whose
clients  hold a majority  interest in the Company,  approached  several of their
business  associates to redirect and manage the Company.  In February  2000, the
Company  appointed  Adam Goldberg as it's President and Chairman of the Board of
Directors, and Steven Angel as its Secretary and Executive Vice President.

     In March 2000, the Company set forth to strengthen  its financial  position
and redefine its business  mission.  As of January 31, 2000,  shortly  after the
resignation of its prior management,  the Company owed approximately  $4,523,000
to various  creditors.  On May 1, 2000, the Company  completed  privately placed
approximately  $1,284,000  of its  common  stock to  accredited  investors.  The
proceeds from this private  placement  are currently  being used to satisfy this
debt, in addition to  supplementing  the Company's  working  capital.  While the
Company is making every effort to satisfy these obligations, it may be forced to
seek legal protection from its creditors under United States  Bankruptcy Code in
the event that these efforts are unsuccessful.

     During this same month, the Company launched its redefined business mission
as an Internet technology and e-commerce  incubator.  The Company's new business
model  provides  early  stage  client   companies  with  extensive   management,
marketing,  finance and  business  development  resources in exchange for equity
positions  in their  businesses.  In light of this shift in focus,  the  Company
formed a wholly owned Delaware  subsidiary,  Fusion Fund,  Inc., which it merged
with and into the Company on March 27,  2000,  for the sole  purpose of changing
its name to Fusion Fund,  Inc. In  connection  with the merger,  the stock began
trading  under the  symbol  "FUFU"  in place of its  previous  symbol  "TGRA" on
Friday, March 31, 2000.

     The  Company  is  currently  focused  on  serving  its  prospective  client
companies and reviewing and selecting potential incubation candidates.


<PAGE>
General

     The Company  provides full service venture capital  incubation to promising
Internet companies in return for equity interests in these clients'  businesses.
The Company  provides its clients with  financial,  managerial,  and  networking
expertise to assist  their  development  and growth in Internet  and  e-commerce
markets.  The Company  intends to expand upon the models of  incubators  such as
CMGI,  Internet  Capital Group,  and Safeguard  Scientifics by allowing  smaller
investors to participate in Internet venture capital financing.

     The Company's  incubation  model focuses on existing  public  companies and
growing  companies  that intend to go public,  after an  accelerated,  intensive
development  period. In addition to providing  extensive services and support to
its clients individually,  the Company plans to acquire a community of companies
that will  provide  services  and support to one another  during the  incubation
process. Initially, the Company plans to invest $1,000,000 to $5,000,000 in each
qualified  company,  but the Company is not limited to a fixed investment in the
event that an appropriate opportunity arise.

Current Incubator Clients

     The Company has entered into non-binding letters of intent to obtain equity
interests in two prospective  incubator  clients:  UpLinkUS,  Inc and InfoActiv,
Inc.

     UpLinkUS,  Inc. purchases,  installs,  and maintains  pay-per-use  Internet
kiosk  terminals  designed to provide  users in high  traffic  locales,  such as
shopping malls, mass transit centers, and business waiting areas, with reliable,
convenient,  and  efficient  Internet  access.  Through these  advanced  kiosks,
UpLinkUS,  Inc. plans to offer its customers broadband access to the Internet as
well as proprietary Internet based services.

     InfoActiv,  Inc.  provides  advanced,   customer-oriented  voice  messaging
solutions and consulting  services to clients worldwide.  Since 1988,  InfoActiv
has developed and deployed voice messaging  solutions  tailored to varied client
requirements in the telecommunications, finance, health care, entertainment, and
government  business  sectors.  InfoActiv's  newest product is a  patent-pending
MessageFinder(TM)  Gateway Service,  which allows telephony and Internet service
companies to provide their customers voice, fax or e-mail message retrieval from
multiple mailbox services from different  companies.  Customers can access these
messages  through any single  point of access such as their  current  telephone,
Internet, mobile phone, or Internet-enabled mobile phone. Unlike unified mailbox
services provided by its competitors, InfoActiv's service allows users to access
multiple  mailbox  services  provided  by their own  suppliers,  such as a local
telephone  company or ISP,  using a single  phone call or Internet  session.  In
addition, unlike other services, these customers do not have to change telephone
numbers or e-mail addresses to listen to their e-mail messages over the phone or
retrieve their voice messages with a PC.

Marketing

     General.

     The  Company's  marketing  and  promotion  strategy  targets  up and coming
internet technology companies through traditional print media advertisements, in
addition to selective informational mailings. We intend to increase our exposure
significantly through our developing online efforts.


<PAGE>
     Internet. The Company is currently constructing a web site on the Internet,
which it  expects  will be  operational  by July  2000.  The site  will  contain
information about the Company's  services,  in addition to its clients' products
and services.

INTELLECTUAL PROPERTY

     Where appropriate,  the Company seeks intellectual  property protection for
its proprietary products and services and those of its clients.

     On May 3, 1999, the Company's  incubator  client,  InfoActiv,  Inc. filed a
provisional  U.S.  patent  application  covering its  MessageFinder(TM)  Gateway
Service. On May 3, 2000, InfoActiv,  Inc. filed a U.S. Utility Application and a
PCT International  patent application.  Each of these filings is currently being
processed.

     The Company intends to seek further intellectual property protection on its
proprietary   technology,   and  its  clients'   technology,   if   appropriate.
Nonetheless,  there can be no assurance that  intellectual  property  protection
will issue from any of the Company's pending or any future  applications or that
any  claim  allowed  from  such  applications  will be of  sufficient  scope  of
strength,  or be issued in all  countries  where the  Company's  products can be
sold,  to provide  meaningful  protection  or any  commercial  advantage  to the
Company.

COMPETITION

     The Company competes with a number of established venture capital providers
specializing in Internet  businesses,  many of which have greater  financial and
other  resources  than the Company.  Some of the Company's  competitors  include
CMGI,  Internet Capital Group, and Safeguard  Scientifics.  The Company competes
with these entities  primarily by focusing on smaller  investors for its venture
capital  financing,  providing a wide array of  expertise  through its  advisory
committee,  and  developing  a portfolio  of smaller,  strategic  ventures  that
demonstrate early-stage entrepreneurial visions of the future of the Internet.

     The  Company  believes  that  many  of  its  current  technology  incubator
competitors are focusing on the  "adolescent"  stage of new ventures to minimize
risk of failure by assuring  that their  clients are firmly  established  before
provide them with  assistance.  The Company  distinguishes  themselves from this
competition by assisting newer,  smaller  entrepreneurs  that meet the company's
screening  criteria and  companies  that have  established  themselves  but need
assistance in furthering  their efforts.  While this target  portfolio is broad,
the  Company  intends  to carve out a market  for  smaller  ventures  to get the
financial  backing and managerial  support they need to succeed in a competitive
market.

EMPLOYEES

         At April 30, 2000, the Company had fourteen  employees and consultants,
including one full-time and one part-time executive, managerial, and supervisory
employee,  five Internet and business  consultants,  and a seven member advisory
panel.  On July  1,  1999,  the  Company  entered  into a five  year  consulting
agreement  with Gary A. Rogers for general  business and merger and  acquisition
consulting.  On February 1, 2000,  the  Company  entered  into a second one year
consulting agreement with Gary A. Rogers for more extensive performance than the
parties  had  previously   contemplated.   Pursuant  to  the  second  consulting
agreement,  Mr.  Rogers  is to be paid  compensation  of  162,500  shares of the
Company's common stock, which shares were registered using Form S-8 on March 29,
2000.


<PAGE>
On February 2, 2000, the Company entered into a consulting  agreement with Sobel
Consulting  Services,  LLC for internet and  e-commerce  specialized  consulting
services to be provided by four consultants.  None of the Company's employees is
covered by a  collective  bargaining  agreement  or is a member of a union.  The
Company believes that its relationship with its employees is satisfactory.

Item 2.  PROPERTIES AND FACILITIES

     The Company's maintains its corporate headquarters office at the 79th Floor
of the World Trade Center, New York, NY. This office  accommodates the Company's
full time corporate and administrative  personnel. The lease on this facility is
month to month with a monthly rent of $2,300.

Item 3.  LEGAL PROCEEDINGS

     The Company is not currently  involved in any legal  proceeding  that could
have a material  adverse  effect on the results of  operations  or the financial
condition of the Company.  From time to time,  the Company may become a party to
litigation incidental to its business. There can be no assurance that any future
legal proceedings will not have a material adverse affect on the Company.

     Nonetheless,  as  described  in the Item 1, above,  as of January 31, 2000,
shortly  after  the  resignation  of its  prior  management,  the  Company  owed
approximately $4,523,000 to various creditors. As of April 30, 2000, none of the
aforementioned obligations have resulted in any legal proceeding that could have
a  material  adverse  effect  on the  results  of  operations  or the  financial
condition of the Company.  Nonetheless,  while the Company is actively  pursuing
adequate resolution and satisfaction of these obligations,  the failure to reach
an adequate  resolution with these creditors may result in litigation that could
have a material  adverse  effect on the results of  operations  or the financial
condition of the Company  and/or may force the Company to seek legal  protection
from its creditors under United States Bankruptcy Code.

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

       None.


                                    PART II.

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

Market For Securities

     The Company's Class A Common Stock,  par value $0.01 has been quoted on the
Over the Counter  Bulletin  Board since March 16, 1999.  The  Company's  Class B
Common Stock,  par value $0.01 per share ("Class B Common  Stock") has no public
trading  market.  The following  table sets forth the high and low sale price of
the Common Stock on a quarterly basis, as reported by Nasdaq:


<PAGE>
Quarter ended:                                    High Price *      Low Price *

     April 30, 1999 (commencing March 19, 1999)        7.250             5.750
     July 31, 1999                                    10.625             6.000
     October 31, 1999                                 11.906            10.312
     January 31, 2000                                 14.562             9.000

           *  Over the counter market quotations  reflect  inter-dealer  prices,
              without  retail  mark-up,  mark-down  or  commission,  and may not
              represent actual transactions.

     As of April 30,  1999 there  were  approximately  127  holders of record of
Class A Common  Stock and no  holders  of record  of Class B Common  Stock.  The
Company has not paid dividends on its shares of Common Stock  outstanding in the
past.  There are no  restrictions  that limit the  ability of the Company to pay
dividends or are likely to do so in the future.

Recent Sales of Unregistered Securities

         On  October  7,  1998,   the  Company   amended  its   certificate   of
incorporation to create two classes of Common Stock.  References to Common Stock
below are to the Common Stock of the Company prior to this Amendment.

         The following  information  is furnished  with regard to all securities
sold by the Company within the past three years which were not registered  under
the  Securities  Act.  The share  numbers set forth below have been  adjusted to
reflect a number of stock  splits.  In August 1996,  the Company  increased  the
number of  authorized  shares of Common  Stock  from  250,000 to  6,500,000  and
simultaneously  effected a 15-for-1  stock split.  In February 1997, the Company
increased  the number of  authorized  shares of Common  Stock from  6,500,000 to
10,881,000 and  simultaneously  effected a 3-for-2  reverse stock split. In July
1997, the Company increased the number of authorized shares of Common Stock from
10,881,000 to 24,300,000.  On January 31, 1998, the Company decreased the number
of authorized shares to 8,100,000 and simultaneously  effected a 3-for-1 reverse
stock split.

         The  issuances  described in this Item 5 were made in reliance upon the
exemption  from  registration  set forth in Section 4(2) of the  Securities  Act
relating to sales by an issuer not  involving any public  offering.  None of the
foregoing   transactions  involved  a  distribution  or  public  offering.   The
recipients of all of these  securities  represented  that such  securities  were
being acquired for investment and not with a view to the  distribution  thereof.
In addition,  the  certificates  evidencing  these  securities bear  restrictive
legends.  All  investors  represented  that they were  either  sophisticated  or
accredited  investors.  All investors were given full disclosure  concerning the
Company and its business as well as a full  opportunity  to ask questions of and
receive answers from the Company and its officers and authorized representatives
regarding the terms and conditions of the offering as well as the affairs of the
Company and related matters.


<PAGE>
The  following  is a list of  issuances  made in reliance of the  aforementioned
exemption from registration, prior to January 31, 1999:

<TABLE>
<CAPTION>
Name                                  Number of Shares  Purchase Price    Date Sold

<S>                                    <C>              <C>                     <C>
Paul Berger                            1,204,800        588,660        February 27,1997
Jim Dodrill                                4,833         10,150        April 22,1997
David Staudinger                           6,666         14,000        July 25, 1997
Walter Maupay                             16,666         35,000        July 31, 1997
Walter & Gina McDonough                    3,333          7,000        August 1, 1997
DDJ Hackworthy Ltd Pp                     47,619        100,000        August 11, 1997
David Stern                                8,333         17,500        August 18, 1997
Ian Woosnam (1)                          104,784        220,047        October 1, 1997
Synergy Group International (2)          200,000        100,000        October 17, 1997
Carol Dodrill/Bill Powell (3)            100,000         50,000        October 28, 1997
Paul Fairchild                            33,333         70,000        October 30, 1997
Rodger Berman (2)                          6,666          5,000        November 10, 1997
Frank Maddocks                            60,000         45,000        November 11, 1997
Glen Day                                  10,000            (4)        January 1, 1998
Dan Snider                                 1,250            (4)        January 1, 1998
Arthur Chou                                1,666            (4)        January 1, 1998
Andrew Holder/Marc Roberts (2)           100,000        100,000        January 23, 1998
Argent Securities, Inc.                  125,000            (4)        January 23,1998
Total................................. 2,034,949
</TABLE>

(1)  Purchase  price was paid by the  individual  forgoing  payments due under a
     contract with Company in amounts equal to the purchase price.

(2)  These  individuals  purchased  stock from Paul Berger and Jim Dodrill,  the
     Company's former President and Secretary.

(3)  These individuals purchased stock from Paul Berger.

(4)  Issued in connection with a services contract.

     In addition,  on May 1, 2000, the Company  completed a private placement of
192,513  Class A Common Stock to eighteen  individuals,  at a price of $6.67 per
share.  The  Company's  gross  proceeds  from the  offering  were  approximately
$1,284,062.  Net proceeds to the Company from this offering  were  approximately
$1,106,160.  Mae Davis Group, Inc. acted as placement agent for the offering and
received approximately $128,401in commissions for its services.

Debt Securities and Warrants

     From February,  1997 through July 1, 1998, the Company issued  unregistered
debt securities and warrants to a number of individuals pursuant to five private
placements  and to Stanley  Berger in  connection  with certain  advances to the
Company.  The issuances made in connection with these  transactions were made in
reliance on Section 4(2) of the Securities Act. In each case, each purchaser was
an accredited investor. The following summary of these transactions reflects the
effect of all stock splits of the Company's Common Stock.

     (a) In January  through  June,  1998,  the Company  sold  through a private
placement a total of 70.1 Units (or portions of a Unit) to 43 individuals  (four
of whom had participated in the first private  placement),  each Unit consisting
of a non-transferable  promissory note in the amount of $50,000 and an option to
receive an additional  $3,125 in cash or a warrant to purchase  25,000 shares of
the Common Stock of the Company.  The  warrants are  convertible  into shares of
Common Stock at $6.90 per share and  terminate  after three  years.  The Company
will register the warrants contemporaneously with registration of this Offering.
Argent  Securities,  Inc. acted as placement agent in the private  placement and
received  compensation  of $499,150  consisting of a 10%  commission and certain
other fees.


<PAGE>
     (b) On July 1,  1998,  the  Company,  the  Company  sold  through a private
placement a total of one Unit to a single individual,  which Unit consisted of a
non-transferable  promissory  note in the  amount of  $400,000  and a warrant to
purchase  533,333  shares of the Common  Stock of the  Company.  The  warrant is
convertible  into shares of Common Stock at $7.50 per share and terminates after
three years.  H.J. Meyers acted as placement agent in the private  placement and
received compensation of $40,000 consisting of a 10% commission.

Item 6.  Management's Discussion and Analysis or Plan of Operation

The  following  discussion  should  be read in  conjunction  with our  financial
statements and notes related thereto.  This discussion contains  forward-looking
statements that involve risks and  uncertainties.  Our actual results may differ
materially  from those  anticipated  in these  forward-looking  statements  as a
result of certain factors discussed in this annual report.

Overview

     In the  first  three  months  of  the  year  2000,  the  Company  underwent
significant  management changes and redirected its business mission.  On January
11,  2000,  Paul H.  Berger  resigned  from his  positions  as  Chairman  of the
Company's  Board of Directors and  Treasurer  and Jim Dodrill  resigned from his
positions as President,  General Counsel,  and Director of the Company.  After a
brief  restructuring  period,  Mae Davis Group, an investment banking firm whose
clients  hold a majority  interest in the Company,  approached  several of their
business  associates to redirect and manage the Company.  In February  2000, the
Company  appointed  Adam Goldberg as it's President and Chairman of the Board of
Directors, and Steven Angel as its Secretary and Executive Vice President.

     In March 2000, the Company set forth to strengthen  its financial  position
and redefine  its  business  mission.  On May 1, 2000,  the Company  completed a
private placement of approximately  $1,284,000 of its common stock to accredited
investors.  The proceeds from this private placement are currently being used to
satisfy  certain  debt,  in  addition to  supplementing  the  Company's  working
capital.  While the Company is making every effort to satisfy these obligations,
it may be forced to seek legal protection from its creditors under United States
Bankruptcy Code in the event that these efforts are unsuccessful.

         In March 2000, the Company  launched its redefined  business mission as
an Internet technology and e-commerce incubator.  Accordingly,  the accompanying
financial  statements  reflect the  results of  discontinued  operations  of the
abandoned  golf  business  for the  years  ended  January  31,  2000  and  1999,
respectively.  The  Company's  new business  model  provides  early stage client
companies with extensive management, marketing, finance and business development
resources in exchange for equity positions in their businesses. In light of this
shift in focus,  the Company formed a wholly owned Delaware  subsidiary,  Fusion
Fund, Inc., which it merged with and into the Company on March 27, 2000, for the
sole purpose of changing its name to Fusion Fund, Inc.

Liquidity and Capital Resources

Our primary  source of liquidity has  historically  consisted of sales of equity
securities  and high yield debt. In March 1999,  we completed an initial  public
offering of our Class A common stock. Through this offering,  we sold a total of
$438,500 shares of our Class A common stock. Net proceeds of this offering, were
approximately  $1,768,000,   inclusive  of  certain  unpaid  offering  expenses.
Additionally,  during the year ended January 31, 2000 we borrowed  approximately
$603,000 from two former officers and directors.


<PAGE>
On May 1, 2000 we raised approximately  $1,284,000 through the sale common stock
to private  investors.  We believe that we will need to raise  additional  funds
from either debt or equity financings in order to achieve our redefined business
mission.

Notwithstanding  the  funds  we  raised  in  the  private  placement  and  other
borrowings,  we are currently  experiencing a severe working capital  deficiency
and are incurring significant losses. As of January 31, 2000 our working capital
deficiency was approximately  $4,149,000 and for the year ended January 31, 2000
we incurred a net loss of  approximately  $5,241,000.  At this time,  we are not
generating any revenues but we are incurring  substantial  costs and expenses in
connection  with  the  launching  of  our  Internet  technology  and  e-commerce
incubator business.

Results of Operations

Year Ended January 31, 2000 Compared To Year Ended January 31, 1999

The  Company  incurred a net loss of  approximately  $5,241,000  during the year
ended January 31, 2000 compared to a net loss of  approximately  $6,399,000  for
the year ended January 31, 1999.

The Company  formally  abandoned  its golf  business in January  2000 and during
March 2000 launched its redefined business mission as an Internet technology and
e-commerce  incubator.  Accordingly the following discussion reports the results
of discontinued operations of the abandoned golf business.

Selling,  general and administrative expenses were approximately $1,381,000 from
non-golf related  activities  during the year ended January 31, 2000 compared to
none during the year ended  January 31, 1999.  The Company  incurred a loss from
discontinued  operations  of  its  abandoned  golf  business  in the  amount  of
approximately  $3,790,000  during the year ended  January 31, 2000 compared to a
loss of approximately $5,854,000 during the year ended January 31, 1999.

Interest  expense was  approximately  $70,000  during the year ended January 31,
2000 compared with interest  expense of  approximately  $545,000 during the year
ended January 31, 1999. This reduction of  approximately  $475,000 was primarily
the result of the conversion of approximately  $6,120,000 of debt into equity at
the end of the year ended January 31, 1999.

Year Ended January 31, 1999 Compared To Year Ended January 31, 1998

The  Company  incurred a net loss of  approximately  $6,399,000  during the year
ended January 31, 1999 compared to a net loss of  approximately  $4,694,000  for
the year ended January 31, 1998.

Loss from  discontinued  operations  for the year  ended  January  31,  1999 was
approximately $5,854,000 compared to approximately $4,449,000 for the year ended
January 31, 1998.

Interest expense was approximately  $545,000 for the year ended January 31, 1999
compared to  approximately  $245,000 for the year ended  January 31, 1998.  This
increase  of  approximately  $300,000  was  primarily  the  result of  increased
borrowings by the Company during the year ended January 31,1999.


<PAGE>
Item 7.  FINANCIAL STATEMENTS

         The Financial  Statements  are included with this report  commencing on
page F-1.

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

(a)      Previous independent accountants

(i)      On April 5, 1999 PricewaterhouseCoopers LLP resigned as the Company's
independent accountants.

(ii)  The  reports  of  PricewaterhouseCoopers  LLP on the  Company's  financial
statements  for the past two  fiscal  years  contained  no  adverse  opinion  or
disclaimer  of opinion and were not  qualified  or modified as to audit scope or
accounting principle;  however, the report of  PricewaterhouseCoopers  LLP dated
June 9,  1998  on the  financial  statements  of the  Company  as of and for the
periods ended January 31, 1998, contained a paragraph of emphasis indicating the
existence of certain factors which raised  substantial doubt about the Company's
ability to continue as a going concern.

(iii) The Company's  Board of Directors have been notified of the resignation of
the PricewaterhouseCoopers LLP as the independent accountants of the Company..

(iv) In connection  with its audits for the two most recent fiscal years and for
the period  from  February  1, 1998  through  April 5, 1999,  there have been no
disagreements  with  PricewaterhouseCoopers  LLP on  any  matter  of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure,   which   disagreements  if  not  resolved  to  the  satisfaction  of
PricewaterhouseCoopers  LLP, would have caused them to make reference thereto in
their report on the financial statements for such years.

(v) The Registrant has requested that PricewaterhouseCoopers LLP furnish it with
a letter  addressed  to the SEC stating  whether or not it agrees with the above
statements.  A copy of such  letter,  dated  April 9,  1999,  has been  filed as
Exhibit 16 to the Company's Form 8-K filed on April 9, 1999.

(b)      New independent accountants:

Effective  April  9,  1999,  Registrant  engaged  Wolinetz,  Gottlieb & Lafazan,
P.C.  as  its  principal  accountant.   Such  engagement  was  approved  by  the
Registrant's Board of Directors.  Since the Registrant's engagement of Wolinetz,
Gottlieb & Lafazan, P.C., the Registrant has not consulted Wolinetz,  Gottlieb &
Lafazan, P.C., regarding the application of accounting principals to a specified
transaction,  the type of audit  opinion that might be rendered on  Registrant's
financial  statements  or any matter that was the subject of  disagreement  or a
reportable event.


                                    PART III

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

Directors and Executive Officers


<PAGE>
         The  following  table sets forth  certain  information  concerning  the
Directors and Executive Officers of the Company:
<TABLE>
<CAPTION>

Name                                            Age            Position

<S>                                             <C>     <C>
Adam Goldberg ............................      35      Chairman of the Board, President, Treasurer
Steven Angel .............................      23      Director, Secretary, Executive Vice President
Sherri Shapiro ...........................      34      Director
</TABLE>

     Adam Goldberg, is the Registrant's President,  Director and Chairman. Since
1993, Mr. Goldberg has been engaged in private legal  practice,  specializing in
real estate,  real estate litigation and securities law. Mr. Goldberg intends to
continue  his  practice  in  addition  to  serving  in his  capacities  with the
Registrant. Mr. Goldberg holds a J.D. from Brooklyn Law School as well as a B.A.
from the State University of New York at Buffalo.

     Steven Angel, is the Registrant's  Secretary and Director.  Since 1998, Mr.
Angel was the Vice President of Power Punch  Promotions.  From 1994 to 1998, Mr.
Angel  attended  the  University  of  Maryland,  where he received a Bachelor of
Science degree in marketing.

     Sherri Shapiro,  is a Director of the  Registrant.  Since 1998, Ms. Shapiro
has engaged in the development of several Internet related  ventures.  From 1994
to 1998,  Ms.  Shapiro was an  associate  with Wolff & Samson LLP.  From 1991 to
1994,  Ms. Shapiro was an associate with Rosenman & Colin LLP. Ms. Shapiro is an
attorney  admitted  to the bars of the  states of New York and New  Jersey.  Ms.
Shapiro  received an A.B. in government from the College of Arts and Sciences at
Cornell  University  and received a J.D. from  Georgetown  University Law Center
where she was a member of The Tax Lawyer.


Committees of the Board of Directors

     The Board of Directors  currently consists of Adam Goldberg,  Steven Angel,
and Sherri Shapiro and does not currently  have a  Compensation  Committee or an
Audit Committee.  The Company is currently seeking qualified candidates in order
to expand the size of the Board of Directors.  Subsequent to such increase,  the
Board of Directors  intends to establish and form a  Compensation  Committee and
Audit Committee.

Compensation of Directors

The  Company's  directors  will be  reimbursed  for any  out-of-pocket  expenses
incurred  by them for  attendance  at  meetings  of the  Board of  Directors  or
committees thereof.  The Board of Directors also intends to compensate Directors
who are not employees of the Company $1,000 per month and to grant each Director
who is not an  employee  of the Company  options to  purchase  12,000  shares of
Common Stock each year,  with a per share  exercise price equal to the then fair
market value of the Common Stock.

Section 16(a) Beneficial Ownership Reporting Compliance

     Based  solely  upon a review of Forms 3, 4 and 5, and  amendments  thereto,
furnished to the Company  during  fiscal year 2000,  the Company is not aware of
any  director,  officer  or  beneficial  owner of more than ten  percent  of the
Company's Common Stock that, during fiscal year 2000, failed to file on a timely
basis reports required by Section 16(a) of the Securities Exchange Act of 1934.


<PAGE>
Item 10. EXECUTIVE COMPENSATION

         The   following   table  sets  forth  certain   information   regarding
compensation paid by the Company during each of the last two fiscal years to the
Company's  Chief  Executive  Officer  and to  each  of the  Company's  executive
officers who earned in excess of $100,000.

<TABLE>
<CAPTION>
Summary Compensation Table

SUMMARY COMPENSATION TABLE



                                                        ANNUAL COMPENSATION                             LONG-TERM COMPENSATION
                                                                                                  AWARDS              PAYOUTS
                                                                                         Restricted    Securities LTIP     All Other
                                                                               Other        Stock      Underlying Payouts   Compen-
                                                                               Annual      Award(s)     Options/   ($)      sation
                                                                               Compen-       (2)                              ($)
NAME AND PRINCIPAL POSITION                       YEAR     SALARY     BONUS    sation (1)
- ----------------------------------------------------------------------------  -----------------  ---------------------------------
<S>                                               <C>     <C>           <C>       <C>        <C>          <C>      <C>         <C>
Paul H. Berger.................................   2000    $ 30,000      ---       ---        ---          ---      ---         ---
  Chairman of the Board and Chief                 1999    $ 31,249      ---       ---        (3)          ---      ---         ---
  Executive Officer

Gary M. Treater................................   2000    $ 12,826      ---       ---     $12,826 (4)     ---      ---         ---
  Executive Vice President                        1999     115,434      ---       ---        ---          ---      (5)         ---

Neal J. Cohen..................................   2000    $109,100      ---       ---     $40,963 (6)     ---      ---         ---
  Vice President Apparel Operations               1999     101,700      ---       ---        ---          ---      (7)         ---
</TABLE>


(1)  Other Annual Compensation consists of life insurance premiums paid by the
     Company on behalf of the Named Executive Officer. See "--Benefit Plans--
     MONY Plan."

(2)  See "Option Grants in Last Fiscal Year," below.

(3)  Mr. Berger deferred an additional $93,751.

(4)  Representing  value of 2,212 shares of restricted  stock, at date of grant,
     paid in May 1999, as deffered payment for services previously rendered.

(5)  Mr. Treater deferred an additional $25,652.

(6)  Representing  value of 5,650 shares of restricted  stock, at date of grant,
     paid in May 1999, as deffered payment for services previously rendered.

(7)  Mr. Cohen deferred an additional $33,900.


STOCK OPTIONS GRANTS AND EXERCISES

     The Company made no option grants to any named  executive  officers  during
fiscal year ended January 31, 2000:


<PAGE>
     The  following  table shows the value at January  31,  2000 of  unexercised
options held by the named executive officers:

                 Aggregated Option Exercises in Last Fiscal Year
                        And Fiscal Year-end Option Values
<TABLE>
<CAPTION>

                                                          Number of Securities
                          Shares                         Underlying Unexercised       Value of Unexercised
                         Acquired           Value              Options at            In-the-Money Options at
                            On             Realized       Fiscal Year-end (#)          Fiscal Year-end ($)
Name                   Exercise (#)          ($)       Exercisable/Unexercisable   Exercisable/ Unexercisable
----                   ------------          ----      -------------------------   --------------------------
<S>                       <C>              <C>                      <C>                         <C>
Paul H. Berger            19,275           280,675                  0                           0
----------------
</TABLE>



EMPLOYMENT AGREEMENTS

         The Company has no material employment agreements.

STOCK OPTION PLANS.  The 1996 Incentive and Non-Qualified Stock Option Plan
(the "1996  Plan") was adopted by the Board of Directors  and the  shareholders.
Under the 1996 Plan, 1,150,000 shares of Class A Common Stock have been reserved
for issuance upon exercise of options  designated as either (i) incentive  stock
options  ("ISOs")  under  the  Internal  Revenue  Code  (the  "Code"),  or  (ii)
non-qualified  options. ISOs may be granted under the 1996 Plan to employees and
officers of the Company.  Non-qualified  options may be granted to  consultants,
directors and other persons who render services to the Company or any subsidiary
corporation of the Company (whether or not they are employees).

     The 1998 Incentive and Non-Qualified Stock Option Plan (the "1998 Plan" and
collectively  with the 1996  Plan,  the  "Plans")  was  adopted  by the Board of
Directors  and the  shareholders  of the Company in June,  1998.  Under the 1998
Plan,  800,000  shares of Class A Common  Stock have been  reserved for issuance
upon  exercise  of options  designated  as either (i)  incentive  stock  options
("ISOs")  under the Internal  Revenue Code (the "Code"),  or (ii)  non-qualified
options.  ISOs may be granted  under the 1998 Plan to employees  and officers of
the  Company.  Non-qualified  options  may be granted to  consultants  and other
persons who render services to the Company or any subsidiary  corporation of the
Company  (whether  or not  they  are  employees),  and to all  directors  of the
Company.

     The purpose of the Plans is to provide additional incentive to officers and
other  employees of the Company as well as other persons  providing  services to
the  Company by  affording  them an  opportunity  to acquire or  increase  their
proprietary  interest in the Company  through the  acquisition  of shares of its
Common Stock. The Board of Directors is responsible for administering the Plans.
The 1998 Plan may also be administered by a committee consisting of at least two
disinterested  directors.  The Board,  within the limitations of the Plans,  may
determine  the persons to whom options will be granted,  the number of shares to
be covered by each option,  whether the options granted are intended to be ISOs,
the duration and rate of exercise of each option,  the option purchase price per
share and the manner of  exercise,  the time,  manner  and form of payment  upon
exercise of an option, and whether restrictions such as repurchase rights by the
Company are to be imposed on shares  subject to options.  ISOs granted under the
Plans may not be granted at a price less than the fair market value of the Class
A Common Stock on the date of grant (or 110% of fair market value in the case of
persons  holding 10% or more of the voting  power of all classes of stock of the

<PAGE>
Company).  The  aggregate  fair market  value at the time of grant of shares for
which  ISOs  granted to any  person  are  exercisable  for the first time by any
person during any calendar year may not exceed $100,000. Options under the Plans
may not be granted more than 10 years after its effective date.  Options granted
to date have seven (7) year terms.  The term of each ISO granted under the Plans
will expire not more than ten years from the date of grant (or five (5) years in
the case of persons  holding  10% or more of the voting  power of all classes of
stock of the  Company).  Options  granted  under the Plans are not  transferable
during an optionee's lifetime but are transferable at death by will or under the
laws of descent and distribution.  No ISOs and non-qualified options to purchase
shares of Class A Common Stock have been granted to employees or  consultants of
the Company in the fiscal year 2000.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         AND MANAGEMENT

Principal Stockholders

     The following table sets forth certain information,  as of the date hereof,
with respect to the beneficial  ownership of the Common Stock by each beneficial
owner of more than 5% of the outstanding shares thereof, by each director,  each
nominee  to  become  a  director  and  each  executive   named  in  the  Summary
Compensation  Table and by all  executive  officers,  directors  and nominees to
become directors of the Company as a group.
<TABLE>
<CAPTION>

                  NAME AND ADDRESS
                  OF BENEFICIAL OWNER,
                  5% STOCKHOLDER OR                                     BENEFICIAL OWNERSHIP
                  SELLING STOCKHOLDER                                        NUMBER            PERCENT
- ----------------------------------------------------        -------------------------------------------
<S>                                                                           <C>                <C>
Adam Goldberg.......................................................          5,500              0.09%
Steven Angel........................................................         10,000              0.17%
Sherri Shapiro......................................................              0              0.00%
Gary Rogers.........................................................        304,921              5.35%
Paul Berger.........................................................      1,271,724             22.30%
Jim Dodrill.........................................................        473,663              8.30%
All directors and executive officers
of the Company as a group
(3  persons) .......................................................         15,500              0.26%

</TABLE>
Item 12. CERTAIN TRANSACTIONS

Transactions Involving Affiliates of the Company

     From time to time throughout the period covered in this report, the Company
has had no independent  directors on its board.  During those times, none of the
ongoing transactions,  or prior transactions which were closed in those periods,
between the Company and its affiliates  were approved by independent  directors.
In the event the Company makes or enters into any material transactions or loans
with  affiliated  persons  during  a  period  in  which  it has  no  independent
directors,  the terms of any such  transactions will be no less favorable to the
Company  than  those  that can be  obtained  from  unaffiliated  third  parties.
Additionally,  any  forgiveness  of such loans will be approved by a majority of
the Company's independent  directors,  once elected, who do not have an interest
in the transactions.  Such directors will have access, at the Company's expense,
to the Company's or independent counsel.


<PAGE>
Transactions involving Paul Berger

     Between July 31, 1998, and October 26, 1999,  Paul Berger,  Chairman of the
Board of Directors and Chief Executive Officer of the Company,  made a number of
advances to the Company.  On July 31, 1998, Mr. Berger  advanced  $17,500 to the
Company.  Mr.  Berger  received a note from the Company for the advance  with an
annual  interest  rate of 12.5%.  In  January  1999,  Mr.  Berger  exchanged  an
aggregate of $170,000 principal amount of indebtedness plus accrued interest for
an aggregate of 39,125 shares of Common Stock and 39,125 Warrants.

     In April 1999, Mr. Berger advanced  $250,000 to the Company in exchange for
notes payable bearing  interest at the prime rate of interest.  $100,000 of this
advance was due on the  earlier of March 1, 2000 or within  five days  following
the closing of a public offering of equity  securities of the Company  resulting
in gross proceeds to the Company of $5,000,000.  The remaining  $150,000 of this
advance was due on the earlier of April 20, 2004, or within five days  following
the closing of a public offering of equity  securities of the Company  resulting
in gross proceeds to the Company of $5,000,000. The Company is in default of the
$100,000 payments.

     In October 1999, Mr.Berger advanced $170,295 to the Company in exchange for
notes payable bearing  interest at the prime rate of interest.  These notes were
due on December 1, 1999. The Company is in default of this payment.

Transactions involving Jim Dodrill

     In November  through  January,  Jim Dodrill advanced a total of $182,500 to
the Company. The loans were to bear interest at the prime rate of interest.  The
Company has not yet repaid these loans.

ENGAGEMENT OF MAE DAVIS GROUP AS PLACEMENT AGENT

     In April  2000,  the  Company  engaged  Mae  Davis  Group,  Inc.  to act as
placement  agent for a private  placement of 192,513 Class A Common Stock,  at a
price of $6.67 per share.  The Company's  gross  proceeds from the offering were
approximately $1,284,062. Mae Davis Group, Inc. received a 10% placement agent's
commission, totaling $128,401, in connection its services in the offering.



ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
         (a) Exhibits

<S>                   <C>
          3.1*        Articles of Incorporation of the Registrant(1)
          3.2*        By-laws of Registrant(1)
          4.1*        Specimen Common Stock Certificate(3)
         10.1*        Employment Agreement with William Barthold, dated January 16, 1996
         10.2*        Employment Agreement with Daniel Snider, dated January 16, 1998
         10.3*        Business Note and Security Agreement, dated June 19, 1997 with Barnett Bank, N.A.
         10.4*        Revolving Accounts Receivable Funding Agreement between the Company and Gibraltar Financial
                      Corporation, dated November 25, 1997

<PAGE>
         10.5*        Amendment to Revolving Accounts Receivable Funding Agreement dated November 25, 1997
         10.6*        Gibraltar Financial Corporation Demand Note, dated November 25, 1997
         10.7*        Form of Promissory  Note signed by the Company in favor of
                      Paul  Berger,  Jim  Dodrill  and  Stanley  Berger  for all
                      advances  made  by  them  to the  Company  10.8*  Security
                      Agreement with Stanley Berger, dated October 1, 1997 10.9*
                      Subordination   Agreement  with  Stanley   Berger,   dated
                      December 3, 1997
         10.10*       Option, dated January 24, 1997, received by Paul Berger as consideration for an advance
                      made by him to the Company
         10.11*       Option, dated September 5, 1996, received by Jim Dodrill as consideration for an advance
                      made by him to the Company
         10.12*       Form of Warrant for the purchase of the Common Stock of the Company received by Stanley
                      Berger as consideration for advances made by him to the Company
         10.13*       Form of Promissory  Note signed by the Company in favor of
                      all participants in a private  financing  between February
                      4, 1997 and April 30, 1997
         10.14*       Form of Warrant for the  purchase  of the Common  Stock of
                      the  Company  received  by all  participants  in a private
                      financing between February 4, 1997 and April 30, 1997
         10.15*       Form of Promissory  Note signed by the Company in favor of
                      all  participants in a private  financing  between May 12,
                      1997 and June 30, 1997
         10.16*       Form of Warrant for the  purchase  of the Common  Stock of
                      the  Company  received  by all  participants  in a private
                      financing between May 12, 1997 and June 30, 1997
         10.17*       Form of Promissory Note signed by the Company in favor of all participants in a private
                      financing in July, 1997
         10.18*       Form of Warrant for the purchase of the Common Stock of the Company received by all
                      participants in a private financing in July, 1997
         10.19*       Form of Consent to extension of payment for all Notes executed by the Company in all
                      private financings
         10.20*       Form of Subscription Agreement signed by all investors in the Company
         10.21*       Lease Agreement, dated March 13, 1997, between the Company and Sanctuary of Boca, Inc. (for
                      office space in Boca Raton)
         10.22*       Amendment to Lease #1, dated August 1, 1997, between the Company and Sanctuary of Boca, Inc.
         10.23*       Amendment to Lease #2, dated February 2, 1998, between the Company and Sanctuary of Boca,
                      Inc.
         10.24*       Sublease  Agreement  and Rider,  dated  December  1, 1996,
                      between the Company and Tom Rochon  Associates (for office
                      space  in  New  York   City)  and   Over-Lease   Agreement
                      incorporated therein
<PAGE>
         10.25*       Sublease Agreement and Rider, dated July 12, 1996, between
                      the Company and Tom Rochon Associates (for office space in
                      New  York  City)  and  Over-Lease  Agreement  incorporated
                      therein
         10.26*       Research, Development and Consulting Contract, dated October 8, 1996, with Chou Golf Design
                      Labs, Inc.
         10.27*       Contract Amendment, dated may 4, 1997, to Research, Development and Consulting Contract
                      with Chou Golf Design Labs, Inc.
         10.28*       Agreement, dated September 1, 1998, with G. Day Associates, Inc.
         10.29*       1996 Incentive and Non-qualified Stock Option Plan
         10.30*       Form of Incentive Stock Option Agreement under 1996 Incentive and Non-qualified Stock
                      Option Plan
         10.31*       Form of Non-qualified Stock Option Agreement under 1996 Incentive and Non-qualified Stock
                      Option Plan
         10.32*       1998 Incentive and Non-qualified Stock Option Plan
         10.33*       Form of Incentive Stock Option Agreement under 1998 Incentive and Non-qualified Stock
                      Option Plan
         10.34*       Form of Non-qualified Stock Option Agreement under 1998 Incentive and Non-qualified Stock
                      Option Plan
         10.35*       MONY Deferred Compensation Plan for managers of the Company
         10.36*       Settlement Agreement and Release, dated May 4, 1998 between the Company and Hippo Holdings
                      Ltd
         10.37*       Consulting Agreement, dated April 29, 1998 between the Company and Argent Securities. Inc.
         10.38*       Form of Non-qualified Stock Option Agreement for Outside Directors under 1998 Incentive and
                      Non-qualified Stock Option Plan
         10.39*       Termination  Agreement,  dated  September  1, 1998  between the Company and Daniel  Snider
         10.41*       Form of Exchange  Agreement
         10.42***     Form of  Consulting  Agreement  between the Company and Gary A. Rogers, dated July 1, 1999
         10.43***     Form of  Consulting  Agreement  between the Company and Gary A. Rogers,  dated  February 1, 2000
         10.44***     Form of Consulting  Agreement  between  the Company  and  Consulting  Agreement between the
                      Company and Sobel Consulting Services, LLC, dated February 2, 2000
         10.44***     Form of promissory  note between the Company and Paul Berger,  dated April 22, 1999
         10.45***     Form of promissory  note between the Company and Paul  Berger,  dated  October 26, 1999
         16.1*        Letter on Change in Certifying Accountants
         27**         Financial Data Schedule
</TABLE>

         ----------------
           *   Previously filed.
           **  Filed herewith.
           *** To be filed by amendment.



(b) Reports on Form 8-K.


<PAGE>
     The following Reports on Form 8-K were filed during the last quarter of the
period covered by this report, and from that date to the date hereof:

<TABLE>
<CAPTION>
     Date                           Item Reported

<S>                        <C>
November 24, 1999          Resignation of Paul Berger as Chief Executive Officer.

February 3, 2000           Appointment of new directors and resignation of officers.

March 9, 2000              Resignation of directors and officers and appointment of new directors and officers.

May 11, 2000               Change in Company name from Outlook Sports Technology, Inc. to Fusion Fund, Inc.

</TABLE>

<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Fusion Fund, Inc.


By: /s/ Steven Angel
        Steven Angel, Secretary

Date May 15, 2000


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed below by the following  persons in the  capacities and on
the dates indicated.
<TABLE>
<CAPTION>

Name                            Position                                Date

<S>                             <C>                                     <C>
/s/ Adam Goldberg               Chairman, President, Treasurer          May 15, 2000
    Adam Goldberg

/s/ Steven Angel                Director, Secretary                     May 15, 2000
    Steven Angel

/s/ Sherri Shapiro              Director                                May 15, 2000
    Sherri Shapiro
</TABLE>

<PAGE>
                                FUSION FUND, INC.

                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)

                          INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

Page

<S>                                                                                                          <C>
Report of Independent Accountants                                                                          F-2

Balance Sheet, January 31, 2000                                                                            F-3

Statements of Operations, Years Ended
  January 31, 2000 and 1999                                                                                F-4

Statements of Changes in Shareholders' Deficit, Years Ended
  January 31, 2000 and 1999                                                                                F-5

Statements of Cash Flows, Years Ended
  January 31, 2000 and 1999                                                                                F-7

Notes to Financial Statements                                                                              F-10


</TABLE>




























                                       F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Shareholders
Fusion Fund, Inc.
F/K/A Outlook Sports Technology, Inc.

We have  audited the  accompanying  balance  sheet of Fusion Fund,  Inc.  (F/K/A
Outlook  Sports  Technology,  Inc.) as of  January  31,  2000,  and the  related
statements of operations,  changes in shareholders'  deficit, and cash flows for
the  years  ended  January  31,  2000 and  January  31,  1999.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 Fusion Fund,  Inc.  (F/K/A
Outlook Sports Technology,  Inc.) as of January 31, 2000, and the results of its
operations  and its cash flows for the years ended  January 31, 2000 and January
31, 1999 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  discussed  in  Note 1 to the
financial  statements,  the Company has incurred  recurring  losses and negative
cash  flows  from   operations  and  has  a  working   deficiency   capital  and
shareholders' deficit at January 31, 2000. These factors raise substantial doubt
about the Company's ability to continue as a going concern.  Management's  plans
in regard to these matters are described in Note 1. The financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

                                              WOLINETZ, GOTTLIEB & LAFAZAN, P.C.



Rockville Centre, New York
April 6, 2000

                                       F-2




<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                                  BALANCE SHEET
                                JANUARY 31, 2000
<TABLE>
<CAPTION>

                                     ASSETS

Current Assets:
<S>                                                               <C>
  Cash and cash equivalents ...................................   $    183,629

  Accounts receivable (net of allowance for doubtful accounts
    of $275,206) ..............................................           --
  Inventories (net of allowance of $116,000)                              --
                                                                    ----------
                                                                  $    183,629
                                                                    ==========
                      LIABILITIES AND SHAREHOLDERS' DEFICIT

Current Liabilities:
  Accounts payable ............................................   $  1,678,449
  Accrued expenses ............................................      1,009,400
  Accrued wages and related expenses ..........................        729,568
  Accrued interest payable ....................................         62,671
  Notes payable ...............................................        399,984
  Notes payable - stockholders - current portion ..............        452,796
                                                                    ----------
         Total current liabilities ............................      4,332,868

Notes payable - stockholders - long-term ......................        190,000
                                                                    ----------
                                                                     4,522,868

Commitments and contingencies

Shareholders' Deficit:
  Preferred stock; $.01 par value, 5,000,000 shares authorized,
    none issued and outstanding ...............................           --
  Common stock; Class A, $.01 par value, 15,000,000
    shares authorized; 5,178,097 shares issued ................         51,781
  Common stock; Class B, $.01 par value, 5,000,000 shares
    authorized; no shares issued and outstanding ..............           --
  Treasury stock; 175,000 Class A shares at cost ..............        (50,550)
  Additional paid-in capital ..................................     14,371,584
  Accumulated deficit .........................................    (18,712,054)
                                                                    ----------
         Total shareholders' deficit ..........................     (4,339,239)
                                                                    ----------
                                                                  $    183,629
                                                                    ==========

</TABLE>
   The accompanying notes are an integral part of these financial statements.


                                      F-3

<PAGE>
                               FUSION FUND, INC.
                    (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                            Year Ended
                                                            January 31,
                                                       2000           1999

<S>                                              <C>            <C>
Revenues .....................................   $      --      $      --
                                                  -----------    -----------

Costs and expenses:
  Cost of sales ..............................          --             --
  Selling, general and administrative expenses     1,381,250           --
                                                  -----------    -----------

         Total costs and expenses ............     1,381,250           --
                                                  -----------    -----------

Loss from operations .........................    (1,381,250)          --
                                                  -----------    -----------

Other income (expense):
  Interest expense ...........................      ( 70,470)      (544,869)
  Interest Income ............................           143           --
                                                  -----------    -----------

         Total other income (expense) ........      ( 70,327)      (544,869)
                                                  -----------    -----------

Loss before loss from discontinued operations     (1,451,577)      (544,869)

Discontinued operations:
  Loss from operations of abandoned business .    (3,789,743)    (5,853,662)
                                                  -----------    -----------

Net loss .....................................   $(5,241,320)   $(6,398,531)
                                                  ===========    ===========

Weighted average common shares outstanding ...     4,283,677      2,739,376
                                                  ===========    ===========

Net loss per common share - basic:

  Operations .................................   $      (.34)   $      (.20)
  Discontinued operations ....................          (.88)         (2.14)
                                                  -----------    -----------
 Net loss ...................................    $     (1.22)   $     (2.34)
                                                  ===========    ===========
</TABLE>


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

                                       F-4
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                  STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
                YEARS ENDED JANUARY 31, 1999 AND JANUARY 31, 2000
<TABLE>
<CAPTION>

                                                                                           Additional
                                                     Common Stock           Treasury        Paid in                     Total
                                              Shares            Amount        Stock         Capital   Accumulated    Shareholders'
                                                                                                        Deficit         Deficit

<S>               <C>                        <C>          <C>            <C>             <C>            <C>             <C>
Balance, February 1, 1998 .............      2,324,071    $     23,241   $       --      $  2,306,543   $(7,072,203)    $(4,742,419)

Issuance of common stock
  for payment of services .............        242,700           2,427           --           411,786           --          414,213

Issuance of common stock
  upon conversion of debt .............      1,224,257          12,243           --         6,109,041           --        6,121,284

Issuance of common stock
  as debt issuance expense ............          8,000              80           --            39,920           --           40,000

Issuance of stock purchase warrants
  as payment of accrued interest ......           --              --             --            25,000           --           25,000

Treasury stock, 50,000 shares .........           --              --        (19,300)             --              --         (19,300)

Net loss ..............................           --              --             --              --       (6,398,531)    (6,398,531)
                                         ------------    ------------   ------------    ------------    ------------    ------------
Balance, February 1, 1999 .............      3,799,028          37,991      (19,300)        8,892,290    (13,470,734)    (4,559,753)

Issuance of common stock ..............         53,750             537           --           214,463           --          215,000

Stock option compensation .............           --              --             --           432,248           --          432,248

Issuance of common stock pursuant
  to initial public offering ..........        438,500           4,385           --         1,763,227           --        1,767,612

Issuance of common stock as
  consideration for accrued liabilities         46,881             469           --           235,702           --          236,171

Issuance of common stock for
  payment of services .................        205,319           2,053           --         1,743,237           --        1,745,290

Issuance of common stock for payment
  of unsecured note payable ...........         65,000             650           --           730,600           --          731,250

Issuance of common stock as debt
  issuance expense ....................         10,000             100           --            49,900           --           50,000

Issuance of stock purchase warrants
  as payment of accrued interest ......           --              --             --           212,813           --          212,813

Issuance of common stock on exercise
  of stock options and warrants .......        682,435           6,824     (2,040,846)      2,214,022           --          180,000

Treasury stock, 125,000 shares ........           --              --          (31,250)          --              --          (31,250)
Expenses of stock offerings ...........           --              --             --           (77,500)          --          (77,500)

Retirement of treasury shares .........       (142,816)         (1,428)     2,040,846      (2,039,418)          --              --

Issuance of common stock in connection
  with expenses of stock offering .....         20,000             200           --              --             --              200

Net loss ..............................           --              --             --              --       (5,241,320)    (5,241,320)
                                         ------------     ------------   ------------    ------------    ------------    -----------

Balance, January 31, 2000 .............      5,178,097    $     51,781   $    (50,550)   $ 14,371,584   $(18,712,054)   $(4,339,239)
                                         =============    ============   ============    ============    ============    ===========
</TABLE>


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

                                       F-5
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                            Year Ended
                                                                                            January 31,
                                                                                     2000               1999
Operating activities:

<S>                                                                                <C>            <C>
  Loss from continuing operations ..............................................   $(1,451,577)   $  (544,869)
                                                                                    -----------     ----------
  Adjustments to reconcile loss from  continuing  operations to net cash used in
    operating activities:

      Depreciation and amortization ............................................       147,821        167,400

      Stock issued for services and to vendors .................................     1,745,290        414,213

      Stock based compensation .................................................       432,248           --
      Stock issued as debt issuance expense ....................................       481,250           --
      Write-down of property and equipment .....................................       232,430           --
      Write-down of inventories ................................................       168,394           --
      Increase in allowances for doubtful accounts and
        sales returns and allowances ...........................................       127,602        112,605

      Changes in operating assets and liabilities:

        (Increase) decrease in accounts receivable .............................      (127,602)        55,095

        Decrease in inventories ................................................        57,410        191,254

        (Increase) decrease in prepaid expenses ................................        33,747        (20,893)

        Decrease in deposits and other current assets ..........................          --           51,813

        Decrease in prepaid royalties ..........................................          --          133,319

        Increase (decrease) in accounts payable and
          accrued expenses .....................................................      (686,910)     2,208,785
                                                                                    -----------     ----------
         Total adjustments .....................................................     2,611,680      3,313,591
                                                                                    -----------     ----------
      Loss from discontinued operations ........................................    (3,789,743)    (5,853,662)
                                                                                    -----------     ----------
Net cash (used) in operating activities ........................................    (2,629,640)    (3,084,940)
                                                                                    -----------     ----------
Investing activities:
  Capital expenditures .........................................................        (3,933)      (302,074)
                                                                                    -----------     ----------
Net cash (used) in investing activities ........................................        (3,933)      (302,074)
                                                                                    -----------     ----------
</TABLE>

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

                                       F-6
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                            STATEMENTS OF CASH FLOWS
                                   (Continued)

<TABLE>
<CAPTION>
                                                                Year Ended
                                                                January 31,
                                                              2000         1999

Financing activities:
<S>                                                    <C>                    <C>
  Net proceeds from (payments to) line of credit ...   $      (116)           100

  Advances from officers ...........................          --           44,147

  Payments of advances from officers ...............       (25,000)         --
  Proceeds from issuance of unsecured notes payable        665,000      4,205,000
  Payments to factor ...............................        (2,744)      (277,394)

  Proceeds from issuance of notes payable -
    related parties ................................       602,796           --
  Repayment of unsecured notes payable .............      (725,000)      (415,500)

  Proceeds from sale of common stock pursuant
    to initial public offering .....................     2,543,300           --
  Expenses of initial public offering ..............      (604,784)          --
  Proceeds from sale of common stock ...............       395,000           --
  Purchase of treasury stock .......................       (31,250)          --
  Deferred offering costs ..........................          --         (170,706)
                                                        -----------    -----------
Net cash provided by financing activities ..........     2,817,202      3,385,647
                                                        -----------    -----------
Net increase (decrease) in cash and cash equivalents       183,629         (1,367)

Cash and cash equivalents, beginning of period .....          --            1,367
                                                        -----------    -----------
Cash and cash equivalents, end of period ...........   $   183,629    $      --
                                                        ===========    ===========

Supplemental disclosure of cash flow information:

  Cash paid for interest ...........................   $    28,308    $     9,322
                                                        ===========    ===========
</TABLE>

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

                                       F-7

<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                            STATEMENTS OF CASH FLOWS
                                   (Continued)

Supplemental disclosure of noncash investing and financing activities:
<TABLE>
<CAPTION>

                                                                                                        Year Ended
                                                                                                        January 31,
                                                                                             2000                          1999
<S>                                                                                 <C>                             <C>
Issuance of 8,000 shares of Class A common stock
  as debt issuance expense                                                          $         -                     $      40,000
                                                                                      =================               =============

Return to the Company of 50,000  shares  of common
  stock  as treasury stock originally issued to a licensor
  in connection with sale of license back to licensor                               $         -                     $      19,300
                                                                                      =================               =============


Issuance of 1,161,666  shares of Class A common stock and 1,161,666  warrants to
  purchase Class A common stock in connection  with  conversion of notes payable
  and accrued interest on notes, pursuant to exchange
  agreement                                                                         $         -                     $   5,808,327
                                                                                      =================               =============


Issuance  of 62,591  shares  of Class A common  stock  and  62,591  warrants  to
  purchase Class A common stock to the Company's  President and Chief  Executive
  Officer in  connection  with  conversion  of advances  made to the Company and
  accrued interest on such advances, pursuant to exchange agreement                 $         -                     $    $312,957
                                                                                      =================               =============


Issuance of 46,881 shares of Class A common stock as
  consideration for accrued liabilities                                             $    236,171                    $         -
                                                                                      =================               =============

Issuance of 65,000 shares of Class A common stock for
  payment of unsecured note payable                                                 $    300,000                    $         -
                                                                                      =================               =============

Warrants granted as payment of accrued interest                                     $    212,813                    $         -
                                                                                      =================               =============

Expenses of stock offering                                                          $     77,500                    $         -
                                                                                      =================               =============

Cashless exercise of stock options and warrants                                     $  2,040,846                    $         -
                                                                                      =================               =============

</TABLE>









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

                                       F-8
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 1 - Organization and Basis of Presentation

     Fusion Fund, Inc. (the "Company") was originally  incorporated in the State
of  Delaware as Outlook  Sports  Technology,  Inc. on February 8, 1996.  Outlook
Sports  Technology,  Inc. was a designer and  marketer  and,  through the use of
contracted  parties,  a manufacturer of golf equipment,  apparel and accessories
under the TEGRA(TM)brand name. During March 2000 Outlook Sports Technology, Inc.
formed a wholly owned Delaware  subsidiary,  Fusion Fund,  Inc., which it merged
with and into for the sole purpose of changing its name to Fusion Fund, Inc.

     During January 2000 the Outlook Sports Technology,  Inc. formally abandoned
the golf business and during March 2000 launched its redefined  business mission
as  an  Internet   technology  and  e-commerce   incubator.   Accordingly,   the
accompanying financial statements reflect the results of discontinued operations
of the  abandoned  golf  business for the years ended January 31, 2000 and 1999,
respectively.

     The accompanying  financial statements have been prepared assuming that the
Company will  continue as a going  concern.  Since its inception in 1996 through
January 31, 2000,  the Company has incurred  recurring  losses of  approximately
$18,712,000   and  has  not  generated  cash  from  its  operating   activities.
Additionally,  at January 31, 2000, the Company had a  shareholders'  deficit of
approximately $4,339,000 and its current liabilities exceeded its current assets
by approximately  $4,149,000.  These factors,  among others,  raise  substantial
doubt about the Company's  ability to continue as a going concern.  Continuation
of the Company is dependent on (i) achieving sufficiently  profitable operations
and (ii)  obtaining  adequate  financings.  These  financial  statements  do not
reflect any adjustments  relating to the  recoverability  and  classification of
asset carrying  amounts or the amount and  classification  of  liabilities  that
might result should the Company be unable to continue as a going concern.

     The Company has been funding its  operations  principally  through debt and
equity  financings.  The Company will need to continue to fund its operations in
this manner until it achieves sufficiently  profitable  operations.  The Company
plans to eliminate the going concern uncertainty by (i) raising additional funds
through debt and/or equity  financings and (ii) by acquiring equity interests in
companies in connection  with its redefined  business  mission.  The achievement
and/or success of these planned measures,  however, cannot be determined at this
time.

NOTE 2 - Summary of Significant Accounting Policies

                  Use of Estimates

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

                  Cash and Cash Equivalents

     The Company  considers those  short-term,  highly liquid  investments  with
original maturities of three months or less as cash and cash equivalents.

                                       F-9
<PAGE>
                               FUSION FUND, INC.
                    (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 2 - Summary of Significant Accounting Policies (Continued)
         ------------------------------------------------------

                  Inventories

     Inventories,  which is  primarily  comprised  of golf  clubs and  component
accessories  and  parts,  is  stated  at the  lower of cost or  market.  Cost is
determined using the first-in,  first-out method.  Market is determined based on
the net  realizable  value.  Appropriate  consideration  is given to  obsolence,
deterioration and other factors in evaluating net realizable value.

                  Revenue Recognition

     Revenue from the sale of non consignment products is recognized at the time
title to such products passes to the customer. Revenue from the sale of products
delivered on consignment is recognized at the time such products are sold by the
customer.

                  Income Taxes

     The Company records deferred income taxes using the liability method. Under
the liability method, deferred tax assets and liabilities are recognized for the
expected future tax consequences of temporary  differences between the financial
statement  and income tax bases of the  Company's  assets  and  liabilities.  An
allowance is recorded,  based upon currently available  information,  when it is
more  likely  than not that any or all of the  deferred  tax  asset  will not be
realized.  The provision for income taxes includes taxes currently  payable,  if
any, plus the net change during the year in deferred tax assets and  liabilities
recorded by the Company.

                  Stock-Based Compensation

     The Company  accounts for  stock-based  compensation to its employees using
the intrinsic  value method,  which  requires the  recognition  of  compensation
expense over the vesting  period of the options  when the exercise  price of the
stock option granted is less than the fair value of the underlying common stock.
Additionally, the Company provides pro forma disclosure of net loss and loss per
share as if the fair value  method had been  applied in  measuring  compensation
expense for stock options granted.  Stock-based  compensation related to options
granted to non-employees is recognized using the fair value method.

                  Loss Per Share

     The  computation  of loss per share of common stock is computed by dividing
net  loss for the  period  by the  weighted  average  number  of  common  shares
outstanding  during that period.  The weighted  average  number of common shares
outstanding for the years ended January 31, 1999 and 2000 excludes approximately
3,218,000  and  4,240,000  respectively,   of  antidilutive  stock  options  and
warrants.

     Because the Company is incurring  losses,  the effect of stock  options and
warrants is  antidilutive.  Accordingly,  the Company's  presentation of diluted
earnings per share is the same as that of basic earnings per share.

                                      F-10
<PAGE>
                                FUSION FUND, INC.
                    (F/K/A/ OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 1999

NOTE 2 - Summary of Significant Accounting Policies (Continued)
         ------------------------------------------------------

                  Fair Value of Financial Instruments

     The carrying value of the Company's financial  instruments,  including cash
and cash equivalents,  accounts receivable,  accounts payable,  accrued expenses
and notes payable approximated fair value because of the short maturity of these
instruments.  The  Company  routinely  assesses  the  financial  strength of its
customers and records an allowance for doubtful accounts when it determines that
collection of a particular amount is unlikely.

                  Reclassifications

     Certain  items in these  financial  statements  have been  reclassified  to
conform to the current period presentation.

NOTE 3 - Notes Payable

                  Notes payable consist of the following:

<TABLE>
<CAPTION>
                 <S>                                                                    <C>
                  Unsecured notes payable to private investors,
                    due September 1998 (see below)                                      $    325,000
                  Unsecured notes payable, interest at 10.5%,
                    due December 1999                                                         40,000
                  Unsecured line of credit, interest at the bank's
                    prime  rate  plus  2%,  guaranteed  by  the
                    Company's former President and Chief Executive
                    Officer, due on demand                                                    34,984
                                                                                        --------------
                                                                                        $    399,984
</TABLE>

     In  January  1998,  as part of a proposed  $3,500,000  debt  offering,  the
Company issued a $50,000 note payable  maturing at the earlier of September 1998
or within 5 days after an initial public offering of the Company's  common stock
generating in excess of $7 million of gross proceeds. From February 1998 through
June 1998 the Company  raised an additional  $3,455,000  through the issuance of
notes payable,  the terms of which were the same as the January 1998 note. Under
the terms of the debt  financing,  for each $50,000  principal the holder of the
note  payable  had the  option to  receive  interest  in the amount of $3,125 or
warrants to purchase 25,000 shares of the Company's  common stock at a price per
share equal that to be offered in connection with the offering of warrants under
the Company's then planned initial public offering, which management expected to
be 115% of the per share initial public offering price.

     In November  1998,  noteholders  of $3,530,000  principal of the $3,905,000
principal described above elected to exchange such indebtedness for an aggregate
of 706,000 shares of the Company's Class A common stock and 706,000  warrants to
purchase  Class A common stock (see Note 6). At January 31, 2000 the Company was
in default on the remaining $325,000 notes payable.

                                      F-11
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 4 -          Notes Payable - Stockholders
                  ----------------------------

                  Notes payable to stockholders consist of the following:

<TABLE>
<CAPTION>
<S>                          <C>                                                        <C>
                  Unsecured notes and loans payable to the Company's former
                    President and Chief Executive Officer, due
                    December 1999, interest at prime rate                               $    352,796
                  Long-term unsecured notes payable to the
                    Company's former Chief Executive  Officer, due
                    April 2004, interest at prime rate                                       150,000
                  Long-term unsecured notes payable to the Company's former
                    Chief Executive Officer, due March 2000, interest at
                    prime rate                                                               100,000
                  Long-term unsecured notes payable to the
                    Company's former President and Chief Executive
                    Officer, interest at 7.5%, due by September 2002                          40,000
                                                                                        --------------
                                                                                             642,796

                  Current portion                                                            452,796
                                                                                        --------------
                  Long-term portion                                                    $     190,000
                                                                                        ==============
</TABLE>

     In  April  1999 the  Company's  former  Chief  Executive  Officer  advanced
$250,000 to the Company in exchange for notes  payable  bearing  interest at the
prime rate of interest. The first $100,000 of this advance is due on the earlier
of March 1, 2000 or within five days following the closing of a public  offering
of equity  securities of the Company  resulting in gross proceeds to the Company
of $5,000,000.  The remaining  $150,000 of this advance is due on the earlier of
April 20, 2004 or within five days following the closing of a public offering of
equity  securities of the Company  resulting in gross proceeds to the Company of
$5,000,000.

NOTE 5 -          Shareholders' Deficit

                  Authorized Capital

     In October  1998,  the Company  increased the  authorized  shares of common
stock from  8,100,000  to  20,000,000.  Within the  authorized  shares of common
stock,  the  Company  created  a  Class A and a Class  B  stock,  consisting  of
15,000,000  and  5,000,000  shares of  stock,  respectively.  Additionally,  the
Company  authorized  5,000,000  shares of preferred  stock,  par value $0.01 per
share.

                  Common Stock

     In March 1998, the Company  issued 104,784 shares to a professional  golfer
as  consideration   for  $220,047  owed  to  such  golfer  under  the  Company's
endorsement arrangement with Hippo Holdings. The Company was then negotiating an
endorsement  contract with this professional  golfer for the Company's TEGRA(TM)
brand products.  These negotiations  ceased prior to any agreement being reached
between the Company and the golfer.

     On April 29, 1998, the Company  entered into a consulting  agreement with a
financial  advisor to obtain financial  investment  services through January 22,
2000.  The  consideration  provided  for in the  agreement  was the  issuance of
125,000 shares of the Company's  common stock.  This agreement was terminated by
the Company in November 1998.  Accordingly,  the Company recorded  $125,000 as a
charge to operations in the current period.

                                      F-12


<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 5 -          Shareholders' Deficit (Continued)

                  Common Stock (Continued)

     In March 1998 the  Company  issued  12,916  shares of Class A common  stock
valued at $69,166 to three consultants in connection with services performed.

     On October 7, 1998,  the Company's  former  President  and Chief  Executive
Officer converted an aggregate of 1,464,953 shares of their Class A common stock
to the equivalent  number of Class B common stock. The Company has agreed not to
register the Class B common stock under the Securities  Exchange Act of 1933 for
a period of two years.  The Class B common stock  converts to an equal amount of
Class A common  stock upon the earlier of (i) October 31, 2000 or (ii) such time
as the closing price for the Class A common stock shall equal or exceed $8 for a
period of 10 consecutive trading days.  Otherwise,  the rights of the holders of
Class A and Class B common stock are substantially the same.

     In November 1998, the Company  executed  exchange  agreements  with certain
noteholders  including  a related  party,  whereby  such  parties  exchanged  an
aggregate of $5,808,327 of principal and interest on notes for 1,161,666 Class A
shares of common  stock and  1,161,666  warrants  to  acquire  Class A shares of
common  stock.  Subsequent  to such  exchange,  the  Company  was in  default on
$375,000 principal notes payable.

     Additionally,  in November 1998 the Company  executed  exchange  agreements
with the Company's  President and Chief Executive Officer who had advanced funds
to the  Company,  whereby  such  officers  exchanged an aggregate of $312,957 of
principal and interest on advances for 62,591 Class A shares of common stock and
62,591 warrants to acquire Class A shares of common stock.

     In March 1999,  the Company  agreed to reacquire  125,000 shares of Class A
common  stock  for  $31,250.  These  shares  were  originally  issued  to Argent
Securities,  Inc.  in  April  1998  in  connection  with a two  year  consulting
agreement. As of January 31, 2000, the entire 125,000 shares have been purchased
as treasury stock.

     During  March  and April  1999 the  Company  completed  an  initial  public
offering of its Class A common stock. The Company sold 438,500 shares of Class A
common stock at $5.80 per share. Net proceeds to the Company were  approximately
$1,768,000 inclusive of certain unpaid offering expenses. In connection with the
offering,  the Underwriters were granted for a nominal fee Common Stock Purchase
Warrants  entitling the  Underwriters to purchase up to 40,000 shares of Class A
common stock at $9.57 per share.

     In June 1999 the  Class B common  stock was  automatically  exchanged  into
shares of Class A common  stock in  accordance  with the  applicable  provisions
which call for such  conversion  to take place at such time as the closing price
of the Class A common  stock  shall  equal or  exceed  $8.00 for a period of ten
consecutive trading days.

     On July 1, 1999 the Company entered into a five year  consulting  agreement
for  management and financial  advisory  services.  The agreement  calls for the
issuance of 162,500  shares of the  Company's  common  stock.  Accordingly,  the
Company  recognized  a charge of  $1,381,250  in the current  period as complete
payment for the five year period.

                                      F-13
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 5 -          Shareholders' Deficit (Continued)

                  Common Stock (Continued)

     In  October  1999 the  Company  issued  65,000  shares of  common  stock as
consideration for payment of $300,000 principal note payable. In connection with
this transaction, the Company recorded a charge of $431,250 to operations.

     In  January  2000 the  Company  issued  26,987  shares of  common  stock in
connection  with the exercise of common stock purchase  warrants and the Company
received proceeds of $180,000.

                  Common Stock Warrants

     In connection  with the issuance of its unsecured  notes payable to private
investors, the Company issued warrants to purchase shares of its common stock as
follows:
<TABLE>
<CAPTION>

                                                            Warrants
                                                  ------------------------------

                                                                Weighted Average
                                                     Shares       Exercise Price

<S>              <C> <C>                            <C>       <C>
Balance, January 31, 1998 .....................     464,150   $        1.12

Warrants issued in connection with extension of
  $975,000 of notes payable at 12.5% ..........      26,813            0.75

Warrants issued in connection with extension of
  $525,000 of notes payable at 15% ............      58,188            0.75

Warrants issued in connection with extension of
  $420,000 of notes payable at 12.5% ..........     130,000            2.78

Warrants issued in connection with $400,000 of
  note payable ................................     533,333            7.25

Warrants issued in connection with exchange of
  $6,121,284 principal and interest (see above)   1,224,257            6.67
                                                  ---------          ------
Balance, January 31, 1999 .....................   2,436,741            5.32

Warrants issued in connection with interest on
  $3,505,000 principal debt financing .........   1,752,500            6.67

Warrants exercised ............................     (93,016)          (6.45)
                                                  ---------          ------
Balance, January 31, 2000 .....................   4,096,225   $        5.87
                                                  ==========        =======

</TABLE>

                                      F-14
<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 5 -          Shareholders' Deficit (Continued)

                  Common Stock Options (Continued)

     On  September  4,  1996,  the  Company   adopted  the  1996  Incentive  and
Non-Qualified  Stock Option Plan (the "1996 Plan") allowing the Company to issue
500,000 incentive stock options to employees and non-qualified  stock options to
either  employees  or  consultants.  The total  number of shares with respect to
which options may be granted was increased to 1.15 million on January 24, 1997.

     In June 1998 the Company adopted the 1998 Incentive and Non-Qualified Stock
Option Plan (the "1998 Plan")  allowing the Company to issue  800,000  incentive
stock options to employees and  non-qualified  stock options to either employees
or consultants.

     The Company has issued various stock options to employees and  consultants.
The options' vesting period varies from full vesting upon issuance of options to
vesting  over a three year  period.  A summary of the  Company's  stock  options
activity is as follows:

                                         Options
                              ----------------------------

                                           Weighted Average
                              Shares        Exercise Price

Balance, January 31, 1998    716,411    $         2.21
Terminated ..............   (101,765)            (3.05)
Granted .................    166,666              8.24
                            ---------           -------

Balance, January 31, 1999    781,312              3.383
Exercised ...............   (589,419)            (2.75)
Cancelled ...............   (175,061)            (2.21)
                            ---------           -------


Balance, January 31, 2000     16,832    $         1.45
                            =========           =======
<TABLE>
<CAPTION>


                                                                      Outstanding      Exercisable   Weighted Average
                Exercise Price Range                                    Shares            Shares      Exercise Price


<S>                <C>                                                    <C>               <C>       <C>
                   $0.225                                                  7,166             7,166    $  0.225
                    0.72                                                   6,166             6,166       0.720
                    6.00                                                   3,000             2,500       6.000
                                                                       ---------        ----------     -------
                                                                          16,832            16,332    $  1.310
                                                                       =========        ==========     =======

</TABLE>

     The  Company  generally  grants  options at  exercise  prices  equal to the
estimated market value of the Company's common stock at the date of the grant.

     Fair market value  information for the Company's stock warrants and options
for  the  year  ended  January  31,  1999  and  2000  was  estimated  using  the
Black-Scholes  option pricing model assuming risk free rates of 5.6% to 6.5%, no
dividend yield, expected terms of 3 years, and no significant volatility.

                                      F-15


<PAGE>
                                FUSION FUND, INC.
                     (F/K/A OUTLOOK SPORTS TECHNOLOGY, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 2000

NOTE 6 - Income Taxes

     The  Company  is  subject to  federal  and state  income  taxes but has not
incurred a liability  for such taxes due to losses  incurred.  As of January 31,
2000 the Company had a net  operating  loss  carryforward  ("NOLC")  for federal
income tax  purposes of  approximately  $15,642,000.  This NOLC is  available to
offset future federal taxable income,  if any, through 2015.  Limitations on the
utilization of the Company's net operating tax loss  carryforwards  could result
in the event of certain changes in the Company's ownership.

     The Company had deferred tax assets of approximately  $6,570,000 at January
31,  2000,  resulting  primarily  from net  operating  loss  carryforwards.  The
deferred  tax assets have been fully offset by a valuation  allowance  resulting
from the  uncertainty  surrounding  the future  realization of the net operating
loss carryforwards.

NOTE 7 -          Commitments and Contingencies

     The  Company  currently  rents  office  space on a month to month basis and
leases equipment under non cancelable operating lease arrangements. Rent expense
for the years ended  January 31, 1999 and 2000 was  approximately  $133,000  and
$55,000, respectively.

     The Company is involved in legal  proceedings and claims which arise in the
ordinary  course of its business.  Management  believes that the outcome of such
litigation  and claims  will not result in any  material  adverse  effect on the
Company's financial position or results of operations.

NOTE 8 - Subsequent Events

     Effective  February 1, 2000 the Company  entered into a one year consulting
agreement. As provided for in consulting agreement, the consultant is to be paid
compensation of 162,500 shares of the Company's common stock,  such shares to be
registered using Form S-8


                                      F-16