<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

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

          FOR THE TRANSITION PERIOD FROM ____________ TO _____________

                         COMMISSION FILE NUMBER: 1-14208

                                  MOSSIMO, INC.

             (Exact name of Registrant as specified in its charter)

           DELAWARE                                           33-0684524
(State or other jurisdiction of                        (I.R.S. Employer ID No.)
incorporation or organization)

           9 PASTEUR
      IRVINE, CALIFORNIA                                     92618 -2215
     (Address of principal                                    (Zip Code)
      executive offices)

                                 (714) 789-0200
              (Registrant's telephone number, including area code)

     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 any 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 the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.

Common Stock, par value                                15,011,529
    $.001 per share                         (Outstanding on August 13, 1998)
        (Class)

                            Exhibit Index on Page 13

<PAGE>


                                  MOSSIMO, INC.

                               INDEX TO FORM 10-Q


<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                              <C>
PART I - FINANCIAL INFORMATION

ITEM 1 - Financial Statements:

Condensed consolidated balance sheets as of June 30, 1998 (unaudited) and December 31, 1997......   2
Condensed consolidated statements of operations for the three months and
    six months ended June 30, 1998 and 1997 (unaudited) .........................................   3
Condensed consolidated statements of cash flows for the six months
    ended June 30, 1998 and 1997 (unaudited) ....................................................   4
Notes to condensed consolidated financial statements ............................................   5

ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations ..   7

PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings ......................................................................  12
ITEM 4 - Submission of Matters to a Vote of Security Holders.....................................  12
ITEM 6 - Exhibits and Reports on Form 8-K .......................................................  12

SIGNATURES ......................................................................................  13

EXHIBIT INDEX ...................................................................................  14

EXHIBITS ........................................................................................  15

</TABLE>

<PAGE>

                          MOSSIMO, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                    JUNE 30,           DECEMBER 31,
                                                                      1998                 1997
                                                                   -----------         ------------
                                                                   (UNAUDITED)
<S>                                                                <C>                 <C>
                                 ASSETS
CURRENT ASSETS:
  Cash and cash equivalents..................................       $    364            $    655
  Accounts receivable, net...................................          1,694               2,473
  Due from factor, net.......................................          4,993               4,001
  Refundable taxes...........................................            346               5,505
  Inventories................................................         12,783              14,437
  Prepaid expenses and other current assets..................            386                 296
                                                                   ---------          ----------
    Total current assets.....................................         20,566              27,367

PROPERTY AND EQUIPMENT, net..................................          5,534               9,182
OTHER ASSETS.................................................            191                 275
                                                                  ----------          ----------
                                                                     $26,291             $36,824
                                                                  ----------          ----------
                                                                  ----------          ----------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Line of credit.............................................        $ 5,660             $ 6,962
  Accounts payable...........................................          2,267               4,126
  Accrued liabilities........................................          2,896               2,389
  Current portion of long-term debt..........................             34                  41
  S distribution note........................................            310                 362
                                                                   ---------            --------
    Total current liabilities................................         11,167              13,880

DEFERRED ROYALTY INCOME......................................            387                 450
DEFERRED RENT................................................             39                  68
LONG-TERM DEBT, net of current portion.......................             17                  31

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, par value $.001; authorized
    shares 3,000,000, no shares issued or outstanding........              -                   -
  Common stock, par value $.001; authorized shares
    30,000,000, issued and outstanding
    15,008,592 - 1998 and 15,000,000 - 1997..................             15                  15
  Additional paid-in capital.................................         31,417              31,386
  Accumulated deficit .......................................        (16,751)             (9,006)
                                                                   ----------          ---------
    Total stockholders' equity...............................         14,681              22,395
                                                                    --------            --------
                                                                     $26,291             $36,824
                                                                  ----------          ----------
                                                                  ----------          ----------

</TABLE>


      See accompanying notes to condensed consolidated financial statements.

                                       2


<PAGE>


                          MOSSIMO, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATE)


<TABLE>
<CAPTION>
                                                  THREE MONTHS              SIX MONTHS
                                                  ENDED JUNE 30,          ENDED JUNE 30,
                                              ---------------------    ---------------------
                                                1998         1997        1998         1997
                                              ----------   --------    ---------   ---------
                                                   (UNAUDITED)              (UNAUDITED)
                         
<S>                                            <C>         <C>         <C>         <C>
Net sales ..................................   $ 11,494    $ 17,611    $ 25,930    $ 41,627
Cost of sales ..............................      9,497      11,698      20,185      28,629
                                               --------    --------    --------    --------
    Gross profit ...........................      1,997       5,913       5,745      12,998
Royalty income, net ........................        722       1,183       1,831       2,608
                                               --------    --------    --------    --------
                                                  2,719       7,096       7,576      15,606
                                               --------    --------    --------    --------
OPERATING EXPENSES:
    General and administrative .............      2,661       2,820       5,633       6,274
    Selling ................................      1,198       1,842       3,173       4,395
    Marketing ..............................        475       1,559       1,052       3,786
    Design .................................        508         770       1,282       1,916
    Lease Restructuring ....................      3,798           -       3,798           -
                                               --------    --------    --------    --------
        Total operating expenses ...........      8,640       6,991      14,938      16,371
                                               --------    --------    --------    --------
        Operating income (loss) ............     (5,921)        105      (7,362)       (765)
                                               --------    --------    --------    --------

OTHER (EXPENSE) INCOME:
    Other, net .............................        (25)        (14)        (73)        (14)
    Interest, net ..........................       (132)        (16)       (310)         24
                                               --------    --------    --------    --------
        Net other (expense) income .........       (157)        (30)       (383)         10
                                               --------    --------    --------    --------
Income (loss) before provision (benefit)
    for income taxes .......................     (6,078)         75      (7,745)       (755)
Provision (benefit) for income taxes .......          -          30           -        (302)
                                               --------    --------    --------    --------
Net income (loss) ..........................   $ (6,078)   $     45    $ (7,745)   $   (453)
                                               --------    --------    --------    --------
                                               --------    --------    --------    --------

Net loss per common share -
    Basic and diluted ......................   $   (.41)    $     -     $  (.52)   $   (.03)
                                               --------    --------    --------    --------
                                               --------    --------    --------    --------

Weighted average common shares outstanding -
    Basic and diluted ......................     15,009      15,020      15,009      15,000
                                               --------    --------    --------    --------
                                               --------    --------    --------    --------

</TABLE>

      See accompanying notes to condensed consolidated financial statements.

                                       3

<PAGE>
                          MOSSIMO, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              FOR THE SIX MONTHS
                                                                                 ENDED JUNE 30,
                                                                              -------------------
                                                                                1998        1997
                                                                               ------      ------
                                                                                   (UNAUDITED)
<S>                                                                            <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ...................................................................   $(7,745)   $  (453)
Adjustment to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization ..........................................     1,056        687
    Loss on disposition of property and equipment ..........................     2,863         20
    Deferred rent ..........................................................       (29)       (14)
    Provision for doubtful receivables .....................................       140        135
    Deferred income taxes ..................................................         -         96
    Changes in:
        Accounts receivable ................................................       639       (372)
        Due from factor ....................................................      (992)     5,499
        Inventories ........................................................     1,654     (2,536)
        Refundable taxes ...................................................     5,159       (503)
        Prepaid expenses and other current assets ..........................       (90)      (677)
        Other assets .......................................................       (31)       (43)
        Accounts payable ...................................................    (1,859)    (2,192)
        Accrued liabilities ................................................       507        485
                                                                                ------     ------
Net cash provided by operating activities ..................................     1,272        132
                                                                                ------     ------

CASH FLOWS FROM INVESTING ACTIVITITES:
Payments for acquisition of property and equipment .........................      (271)    (4,978)
                                                                                ------     ------
        Net cash used in investing activities ..............................      (271)    (4,978)
                                                                                ------     ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in line of credit ...............................................    (1,302)         -
Proceeds from issuance of common stock .....................................        31          -
Repayment of long-term debt ................................................       (21)       (70)
                                                                                ------     ------
        Net cash provided by financing activities ..........................    (1,292)       (70)
                                                                                ------     ------
NET CHANGE IN CASH AND CASH EQUIVALENTS ....................................      (291)    (4,916)
CASH AND CASH EQUIVALENTS, beginning of period .............................       655      7,007
                                                                                ------     ------
CASH AND CASH EQUIVALENTS, end of period ...................................    $  364     $2,091
                                                                                ------     ------
                                                                                ------     ------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION 
    Cash paid during the period for:
        Interest ...........................................................    $  238     $   82
                                                                                ------     ------
                                                                                ------     ------
        Income taxes .......................................................    $    -     $  142
                                                                                ------     ------
                                                                                ------     ------
</TABLE>


      See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>




                          MOSSIMO, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



1.   Organization and Accounting Policies

Organization
------------
     Mossimo Inc. and subsidiary ("Mossimo" or the "Company") designs, 
sources and markets a lifestyle collection of contemporary men's and women's 
denim based sportswear with fashion elements, and men's activewear bearing 
Mossimo(R) trademarks. The Company also designs, sources and markets men's 
and women's eyewear, and licenses its trademarks for use in collections of 
women's swimwear and bodywear, men's neckwear, men's tailored clothing, men's
hosiery and men's and women's accessories. The Company distributes its 
products to a diversified account base, including department stores, 
specialty retailers, and sports and activewear stores located throughout the 
United States, as well as one signature retail store and one outlet store in 
Southern California.

     The accompanying unaudited interim consolidated financial statements of 
the Company have been prepared pursuant to the rules and regulations of the 
Securities and Exchange Commission ("SEC") for reporting on Form 10-Q. 
Accordingly, they do not include all of the information and footnotes 
required by generally accepted accounting principles ("GAAP") for complete 
financial statements. The accompanying unaudited interim condensed 
consolidated financial statements should be read in conjunction with the 
Company's consolidated financial statements for the year ended December 31, 
1997 on Form 10-K.

     In the opinion of management, the unaudited condensed consolidated 
financial statements contain all adjustments, consisting only of normal 
recurring adjustments, necessary for a fair statement of the consolidated 
balance sheets as of June 30, 1998 and December 31, 1997, the consolidated 
statements of operations for the three months and six months ended June 30, 
1998 and 1997, and the consolidated statements of cash flows for the six 
months ended June 30, 1998 and 1997. Operating results for the three and six 
months ended June 30, 1998 are not necessarily indicative of the results that 
may be expected for the entire fiscal year ending December 31, 1998.

     Certain reclassifications have been made in the audited consolidated 
1997 financial statements to conform to the 1998 presentation.

Income (Loss) Per Share
-----------------------
     The company computes income (loss) per share pursuant to SFAS No. 128, 
EARNINGS PER SHARE, which requires the dual presentation of Basic and Diluted 
Earnings per share. The Company adopted this pronouncement in fiscal 1997 and 
has restated prior periods to reflect the adoption of SFAS No. 128. Common 
stock equivalents consisted of outstanding stock options totaling 576,333 and 
512,100 as of June 30, 1998 and 1997, respectively. Common stock equivalents 
have not been included in the calculation of diluted loss per share as their 
effect would have been anti-dilutive for all periods presented.

<TABLE>
<CAPTION>

                                                                SIX MONTHS
                                                               ENDED JUNE 30,
                                                              1998      1997
                                                             ------    -----
<S>                                                          <C>       <C>
Basic weighted average shares outstanding during the period   15,009   15,000
Dilutive effect of stock options ..........................        -        -
                                                             -------   ------
Weighted average common shares outstanding
          Basic and diluted ...............................   15,009   15,000
                                                             -------   ------
                                                             -------   ------
</TABLE>


                                       5
<PAGE>

2.   Credit Facility

     In April 1998, the Company's credit facility was amended to provide for 
a $15.0 million revolving credit line, which is collateralized by inventory, 
receivables, machinery and equipment and tradenames. The Company's borrowings 
under the amended agreement are limited to eligible inventory and 
receivables. Advances under the amended agreement bear interest at the prime 
rate plus 0.5%. The Company's revolving line is committed through January 1, 
1999 with an extension through March 31, 1999, subject to certain conditions.

     Historically, the Company has sold a substantial portion of its trade 
accounts receivable to a factor, which assumes the credit risk with respect 
to collection of nonrecourse accounts receivable in exchange for a fee. The 
factor approves the credit of the Company's customers prior to sale. If the 
factor disapproves of a sale to a customer and the Company decides to proceed 
with the sale, the Company bears the credit risk. The factoring agreement is 
in force until June 1, 2000.

3.   Lease Restructuring

     During the quarter ended June 30, 1998, the Company completed a lease 
restructure resulting in a charge of $3.8 million. The lease restructure 
charge includes (i) $2.7 million in corporate lease restructuring expenses 
and costs, including the write-down of certain fixed assets; (ii) $900,000 
for the discontinuation of the Company's screen printing business; and (iii) 
$200,000 for closing the Company's Pasadena retail store.

4.   Commitments and Contingencies

     LITIGATION - On January 23, 1997, plaintiff Chaile Steinberg filed a 
purported class action suit against the Company and certain other defendants 
on behalf of individuals who purchased the Company's common stock in the 
initial public offering pursuant to the Registration Statement and Prospectus 
("Prospectus"), dated February 22, 1996, and on the open market from February 
22, 1996 through January 14, 1997 (the "Class Period"). In addition to naming 
the Company, the plaintiffs Igor Glaudnikov, Cara Debra Marks and Lois Burke 
filed a second related action against the same defendants. The two cases were 
subsequently consolidated by court order, dated May 19, 1997. Both Steinberg 
and Glaudnikov (collectively, the "State Actions") contain identical factual 
allegations, and only differ in the number of shares purchased by plaintiffs 
and the California residence of two of the plaintiffs in the Glaudnikov 
action.

     The State Actions allege that defendants made false and misleading 
statements and intentionally concealed material negative information in the 
Prospectus and afterward during the Class Period, which artificially inflated 
prices for the Company's common stock. Plaintiffs contend that the class was 
damaged in an unspecified amount as a result of this artificial inflation of 
the Company's stock price.

     On September 23, 1997, a federal class action complaint was filed on 
behalf of plaintiff James Frenkil by the same law firm that represents the 
plaintiffs in the State Actions. One of the named plaintiffs in the federal 
action is a plaintiff in the State Actions. The class period and 
precipitating events are the same as in the State Actions, but the federal 
complaint purports to allege violations of certain federal securities laws. 
On October 17, 1997, the judge stayed the federal action pending further 
development in the State Actions.

     Defendants filed demurrers in the State Actions, challenging the legal 
sufficiency of the complaints. On June 26, 1997, the judge sustained the 
defendant's general demurrer to the complaints in the State Actions, finding 
that neither complaint pleaded facts sufficient to constitute causes of 
action against the defendants. The judge sustained the demurrer as to four of 
the causes of action with leave to amend, and as to the fifth cause of action 
for unlawful, unfair or fraudulent business practices and false or misleading 
advertising without leave to amend. On July 9, 1998, plaintiffs filed their 
first amended consolidated complaint. Defendants must file their response to 
that complaint on or before September 22, 1998.


                                        6

<PAGE>

     Although the outcome of the litigation cannot be predicted, management 
believes that the Company has meritorious defenses and intends to defend this 
action with vigor.

     The Company is involved in certain other legal and administrative 
proceedings and threatened legal and administrative proceedings arising in 
the normal course of its business. While the outcome of such proceedings and 
threatened proceedings cannot be predicted with certainty, in the opinion of 
management, the ultimate resolution of these matters individually or in the 
aggregate will not have a material adverse effect on the Company.


                                       7

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS

     The following discussion includes the operations of Mossimo, Inc. and 
subsidiary for each of the periods discussed. This discussion and analysis 
should be read in conjunction with the Company's Consolidated Financial 
Statements for the year ended December 31, 1997 on Form 10-K.

RESULTS OF OPERATIONS

     THREE MONTHS ENDED JUNE 30, 1998 AND 1997

     Net sales decreased to $11.5 million during the second quarter of 1998 
from $17.6 million in the corresponding quarter in 1997. The decrease in net 
sales was primarily due to a 64% decline in sales for the men's line. Net 
sales of the men's line, which represented 38% of the Company's net sales for 
the three months ended June 30, 1998, decreased to $4.3 million in 1998 from 
$11.9 million in 1997. The reduction was primarily in activewear sales to 
specialty stores and chains. This correlates with the Company's strategy to 
narrow its product base and emphasize the denim based sportswear business, 
which offers the strongest growth potential. Net sales of the women's line, 
which represents 37% of the Company's net sales for the three months ended 
June 30, 1998, increased to $4.2 million in 1998 from $3.9 million in 1997. 
Net sales of the Company's eyewear decreased approximately 50% to $600,000 in 
1998 from $1.2 million in 1997. This was primarily due to a decrease in sales 
of the Moss line.

     Gross profit decreased to $2.0 million during the second quarter of 1998 
from $5.9 million in the corresponding quarter in 1997. Gross profit as a 
percentage of net sales decreased to 17% in this period from 34% in the 
second quarter of 1997. The decrease in gross profit resulted primarily from 
sales of excessive inventory at discounted prices. However, gross profit as a 
percentage of net sales, excluding excessive inventory sales, decreased to 
32% from 37% in 1997. This reduction in gross profit is primarily due to 
lower sales of higher margin activewear products, such as T-shirts and walk 
shorts.

     Royalty income decreased 39%, to $700,000 during the second quarter of 
1998 from $1.2 million in the corresponding quarter in 1997. The decrease was 
primarily attributed to reduced sales by the Company's licensees that carry 
swimwear, bodywear and accessory product categories. Management believes that 
sales of the Company's swimwear licensee were negatively impacted, in part, 
by poor weather conditions on the West Coast. Sales of the Company's 
accessory licensee declined due to a reduction in product categories offered 
in 1998 compared to 1997. This decline reflects the company's strategic 
decision to restructure its accessory product offerings by finding new, more 
aggressive licensees with the ability to market at a department store level. 
This decision is in line with the Company's overall goal to focus on 
department store accounts which the Company believes may provide a more solid 
base for future growth.

     Operating expenses increased to $8.6 million in 1998 from $7.0 million 
in 1997. The increase was primarily due to a lease restructuring charge of 
$3.8 million, which was finalized in the second quarter of 1998. The lease 
restructure charge includes (i) $2.7 million in corporate lease restructuring 
expenses and costs, including the write-down of certain fixed assets; (ii) 
$900,000 for the discontinuation of the Company's screen printing business; 
and (iii) $200,000 for closing the Company's Pasadena retail store.

     During 1998, the Company has reevaluated its office and facilities 
requirements and has agreed to relinquish its existing space for its 
corporate headquarters and approximately half of the space for its 
warehouse/distribution. This lease restructuring relieves the Company of 
annual rental obligations of approximately $1.0 million. The Company is 
currently negotiating for new offices with approximately 15,000 to 20,000 
square feet and a lease term obligation of less than 3 years with total 
annual rent of approximately $300,000. The Company, accordingly, anticipates 
a reduction in annual rental obligations of approximately $700,000.


                                       8
<PAGE>

     Operating expenses, excluding the lease restructuring charge, decreased 
to $4.8 million during the second quarter of 1998 from $7.0 million during 
the second quarter of 1997. Such decrease was primarily due to reduced sales 
commissions, reduced staffing, a reduction in print advertising and overall 
cost cutting measures; offset by increased salary expense for in house sales 
representatives.

     Net interest expense increased to $132,000 during the second quarter of 
1998 from $16,000 during the second quarter of 1997. In 1998, the Company 
increased borrowings on the Company's credit facility primarily due to the 
loss sustained by the Company in fiscal 1997.

     The Company recorded no tax benefit in 1998 as a result of its pretax 
loss compared with a tax provision of $30,000 in 1997. A tax benefit will be 
recorded only to the extent the company can apply for carryback claims in its 
income tax returns.

     SIX MONTHS ENDED JUNE 30, 1998 AND 1997

     Net sales decreased to $25.9 million during the six months ended June 
30, 1998 from $41.6 million during the six months ended June 30, 1997. The 
decrease in net sales was primarily due to a 62% decline in sales for the 
men's line and a 17% decline in women's sales. Net sales of the men's line, 
which represented 42% of the Company's net sales for the six months ended 
June 30, 1998, decreased to $10.8 million in 1998 from $28.1 million in 1997. 
The reduction was primarily in activewear sales to specialty stores and 
chains. This correlates with the Company's strategy to narrow its product 
base and emphasize the denim based sportswear business, which offers the 
strongest growth potential. The decline in the men's line was partially 
offset by sales of the Moss line totaling $2.1 million. Net sales of the 
women's line, which represented approximately 34% of the Company's net sales 
for the six months ended June 30, 1998, decreased to $8.8 million in 1998 
from $10.7 million in 1997. Net sales of the Company's eyewear decreased 
approximately 34% to $1.2 million during the first half of 1998 from $1.8 
million in the same period last year. This was primarily due to a decrease in 
sales of the Moss line.

     Gross profit decreased to $5.7 million during the first half of 1998 
from $13.0 million during the first half of 1997. Gross profit as a 
percentage of net sales decreased to 22% during this period from 31% during 
this period in 1997. The decrease in gross profit resulted primarily from 
sales of excessive inventory at discounted prices. However, gross profit as a 
percentage of net sales, excluding excessive inventory sales, decreased to 
32% during this period from 35% during this period in 1997. This reduction in 
gross profit is primarily due to lower sales of higher margin activewear 
products, such as T-shirts and walk shorts.

     Royalty income decreased 30%, to $1.8 million during the first half of 
1998 from $2.6 million during the fist half of 1997. The decrease was 
primarily attributed to reduced sales by the Company's licensees that carry 
swimwear, bodywear and accessory product categories. Management believes that 
sales of the Company's swimwear licensee were negatively impacted, in part, 
by poor weather conditions on the West Coast. Sales of the Company's 
accessory licensee declined due to a reduction in product categories offered 
during this period in 1998 compared to the corresponding period in 1997. This 
decline reflects the company's strategic decision to restructure its 
accessory product offerings by finding new, more aggressive licensees with 
the ability to market at a department store level. This decision is in line 
with the Company's overall goal to focus on department store accounts which 
the Company believes may provide a more solid base for future growth.

     Operating expenses decreased to $17.9 million during the first six 
months of 1998 from $16.4 million during the first six months of 1997. 
Included in the 1998 operating expenses is a lease restructuring charge of 
$3.8 million, which was finalized in the second quarter of 1998. The lease 
restructure charge includes (i) $2.7 million in corporate lease restructuring 
expenses and costs, including the write-down of certain fixed assets; (ii) 
$900,000 for the discontinuation of the Company's screen printing business; 
and (iii) $200,000 for closing the Company's Pasadena retail store.

     During 1998, the Company has reevaluated its office and facilities 
requirements and has agreed to relinquish 

                                      9
<PAGE>

its existing space for its corporate headquarters and approximately half of 
the space for its warehouse/distribution. This lease restructuring relieves 
the Company of annual rental obligations of approximately $1.0 million. The 
Company is currently negotiating for new offices with approximately 15,000 to 
20,000 square feet and a lease term obligation of less than 3 years with 
total annual rent of approximately $300,000. The Company, accordingly, 
anticipates a reduction in annual rental obligations of approximately 
$700,000.

     Operating expenses, excluding the lease restructuring charge, decreased 
to $11.1 million during the first six months of 1998 from $16.4 million 
during the first six months of 1997. Such decrease was primarily due to 
reduced sales commissions, reduced staffing, a reduction in print 
advertising, the elimination of certain fashion shows and overall cost 
cutting measures; offset by increased salary expense for in house sales 
representatives

     The Company had net interest expense of $310,000 during the first six 
months of 1998 compared to net interest income of $24,000 during the first 
six months of 1997. In 1998, the Company increased borrowings on the 
Company's credit facility primarily due to the loss sustained by the Company 
in fiscal 1997.

     The Company recorded no tax benefit in 1998 as a result of its pretax 
loss compared with a tax benefit of $302,000 in 1997. A tax benefit will be 
recorded only to the extent the Company can apply for carryback claims in its 
income tax returns.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary cash requirements are to fund the Company's 
working capital needs related to inventories, accounts receivable, and 
property and equipment acquisitions. Net cash provided by operating 
activities totaled $1.3 million for the six months ended June 30, 1998. Cash 
utilized in operating activities was comprised of the Company's net loss 
during this period of $7.7 million and cash used to pay down accrued 
liabilities of $1.4 million, offset by a Federal Tax refund of $5.2 million, 
a $1.7 million reduction in inventory and the non-cash charge of $2.8 million 
associated with the write-down of assets related to the lease restructuring. 
At June 30, 1998, working capital was approximately $9.4 million as compared 
to $13.5 million at December 31, 1997. The decline in working capital is due 
to a $1.7 million reduction in inventory, the collection of the refundable 
taxes and funding of the loss sustained by the Company during the first two 
quarters of 1998; partially offset by reductions in current liabilities.

     The Company maintains a $15.0 million revolving credit line, which is 
collateralized by inventory, receivables, machinery and equipment and 
intangibles. The Company's borrowings under the agreement, which was amended 
in April 1998, are limited to eligible inventory and receivables. Advances 
under the amended agreement bear interest at the prime rate plus 0.5%. The 
revolving line is committed through January 1, 1999 with an extension through 
March 31, 1999, subject to certain conditions. As of June 30, 1998 the 
Company had $3.0 million available on the revolving line of credit. The 
Company was also in compliance with all debt covenants.

     Historically, the Company has sold a substantial portion of its trade 
accounts receivable to a factor, which assumes the credit risk with respect 
to collection of nonrecourse accounts receivable in exchange for a fee. The 
factor approves the credit of the Company's customers prior to sale. If the 
factor disapproves of a sale to a customer and the Company decides to proceed 
with the sale, the Company bears the credit risk. The factoring agreement is 
in force through June 1, 2000.

     In 1997, the Company began cost cutting measures to more align its 
expense level with its declining sales. Accordingly, the Company has reduced 
staffing levels, reduced compensation to existing staff and is reviewing 
other cost cutting measures which are designed to reduce operating expenses 
in fiscal 1998.


                                    10

<PAGE>

SEASONALITY

     The Company's business is impacted by general seasonal trends that are 
characteristic of the many companies in the apparel industry. However, due 
primarily to the declining sales experienced in 1997 and 1998, operating 
trends have not reflected the normal apparel industry seasonality. In future 
years, the Company expects that its sales may reflect greater seasonal trends.

FORWARD LOOKING INFORMATION

     This report on Form 10-Q contains certain forward-looking statements 
within the meaning of the "safe harbor" provisions of the Private Securities 
Litigation Reform Act of 1995. Such forward-looking statements are based on 
the beliefs of the Company's management as well as assumptions made by and 
information currently available to the Company's management. The words 
"anticipate", "believe", "may", "estimate" and similar expressions, 
variations of such terms or the negative of such terms as they relate to the 
Company or its management when used in this document are intended to identify 
such forward-looking statements. Such statements are based on management's 
current expectations and are subject to certain risks, uncertainties and 
assumptions. Should one or more risks or uncertainties materialize, or should 
underlying assumptions prove incorrect, the Company's actual results, 
performance or achievements could differ materially from those expressed in, 
or implied by such forward-looking statements.

NEW ACCOUNTING PRONOUNCEMENTS

     Effective January 1, 1998 the Company adopted Statement of Financial 
Accounting Standards Board ("FASB") No. 130, REPORTING COMPREHENSIVE INCOME. 
The Company does not have any material amounts of comprehensive income to 
report.

     In June 1997, the FASB issued SFAS No. 131, DISCLOSURE ABOUT SEGMENTS OF 
AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 131 establishes standards for 
the way public companies report financial information about operating 
segments. The Company will adopt SFAS No. 131 in fiscal 1998, as required. 
This statement may affect disclosure and presentation in the financial 
statements but will not have any impact on the Company's consolidated 
financial position, liquidity, cash flows or results of operations.

YEAR 2000

     Many currently installed computer systems and software products are 
coded to accept only two digit entries in the date code field. These date 
code fields will need to accept four digit entries to distinguish 21st 
century dates from 20th century dates. This inability to recognize or 
properly treat the Year 2000 may cause the Company's systems and applications 
to process critical financial and operational information incorrectly.

     The Company is currently in the process of investigating whether its 
internal accounting systems and other operational systems are Year 2000 
compliant. The Company has been informed by the vendor of its internal 
accounting software that upgrades that will bring such software into Year 
2000 compliance are currently available and will provide them to the Company 
under its existing software maintenance agreement. The Company expects to 
effect the conversion of its internal accounting system to such upgraded 
software by the end of 1998. The Company believes that necessary conversions 
of other operational systems can also be accomplished through vendor upgrades 
and enhancements as provided under its system maintenance agreements 
currently in effect. The Company is in the process of contacting its major 
suppliers and vendors to ensure their awareness of the Year 2000 Problem. If 
the Company, its suppliers or vendors are unable to resolve issues related to 
the year 2000 on a timely basis, it could have a material adverse effect on 
the Company's business and results of operations.


                                      11
<PAGE>

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS (See Note 4 to Financial Statements)


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

          (a)  Annual Meeting:

               The Annual Meeting of stockholders of Mossimo, Inc. was held on
               May 21, 1998.

          (b)  Election of Directors:

               The following Director nominees were elected at the Annual
               Meeting:

                               John H. Stafford - Class III
                               Robert Martini - Class II

               The Directors whose terms of office continue are:

                               Mossimo G. Giannulli - Class I
                               Francesca Ruiz De Luzuriaga - Class I

          (c)  The matter voted upon at the meeting and the results of the vote
               were as follows:
<TABLE>
<CAPTION>

                                         Votes          Votes         Shares
               For Directors:             For          Against      Abstaining
               ---------------        ----------       -------      ----------
               <S>                    <C>              <C>          <C>
               John H. Stafford       14,728,505       101,205          -0-
               Robert Martini         14,730,935       98,775           -0-
</TABLE>

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

          (a)   The following exhibits are included herein:

                3.1    Certificate of Incorporation of the Company*
                3.2    Bylaws of the Company*
               10.4.4  Letter Amendment to Factoring Agreement dated May 21,
                       1998
               10.6.1  Amendment to the lease agreement with the Irvine
                       Company, dated July 10, 1998
               10.7.1  Amendment to the Financing Agreement dated April 1,
                       1998
               27      Financial Data Schedule


          (b)  Reports on Form 8-K


               The Registrant did not file any reports on Form 8-K during the
               three months ended June 30, 1998.

          *    (Incorporated by reference from the Company's Registration
               Statement on Form S-1, File Number 33-80597)


                                      12
<PAGE>


                                   SIGNATURES


     Pursuant to the requirements 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.

           Mossimo, Inc.


           August 14, 1998              /s/ John Brincko
                                        -------------------------------------
                                        John Brincko
                                        Chief Executive Officer and President
                                        (Principal Executive Officer)


           August 14, 1998              /s/ Thora Thoroddsen
                                        --------------------------------------
                                        Thora Thoroddsen
                                        Secretary, Treasurer and Controller
                                        (Principal Accounting Officer)



                                       13
<PAGE>


                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>

   Exhibit
   Number            Description
   ---------------------------------------------------------------
   <S>              <C>
          3.1       Certificate of Incorporation of the Company*

          3.2       Bylaws of the Company*

                    10.4.4  Letter Amendment to Factoring Agreement dated
                            May 21, 1998

                    10.6.1  Amendment to the lease agreement with the Irvine
                            Company, dated July 10, 1998

                    10.7.1  Amendment to the Financing Agreement dated
                            April 1, 1998

          27        Financial Data Schedule

               *    (Incorporated by reference from the Company's Registration
                    Statement on Form S-1, File Number 33-80597)

</TABLE>

                                     14
<PAGE>

                                   SIGNATURES


     Pursuant to the requirements 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.


           Mossimo, Inc.

                                        /s/ John Brincko
           August 14, 1998              --------------------------------------
                                        John Brincko
                                        Chief Executive Officer and President
                                        (Principal Executive Officer)

                                        /s/ Thora Thoroddsen
           August 14, 1998              ---------------------------------------
                                        Thora Thoroddsen
                                        Secretary, Treasurer and Controller
                                        (Principal Accounting Officer)