<PAGE>
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                     FORM 10-QSB
(Mark One)
/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
               EXCHANGE ACT OF 1934

               For the quarterly period ended DECEMBER 31, 1997

                                          OR

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

Commission file number 0-28760

                         Pacific Coast Apparel Company, Inc.
                         -----------------------------------
                (Exact name of registrant as specified in its charter)

          California                                   95-4536683
       --------------                                 ------------
(State or other Jurisdiction of              (IRS Employer Identification No.)
incorporation or organization)


   1620 S. Los Angeles Street
        Los Angeles, CA                                  90015
        ---------------                                 --------
(Address of principal office)                          (Zip Code)

Registrant's telephone number, 
including area code                                  (213) 748-9724
                                                     --------------

                                     Inapplicable
                                     ------------

(Former name, former address and former fiscal year, if changed since last
report)

     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 / /

     Number of shares of common stock 
     outstanding as of December 31, 1997                    2,958,000

Transactional Small Business Disclosure Format    Yes / /    No /X/

<PAGE>

FORWARD-LOOKING INFORMATION

     In addition to historical information, this Report contains forward-looking
statements, such as those pertaining to the Company's future sales and revenues,
profitability, and cash requirements.  Forward-looking statements involve
numerous risks and uncertainties.  The following factors, among others, could
cause actual results and future events to differ materially from those set forth
or contemplated in the forward-looking statements:  economic conditions,
competitive products and pricing, new product development, the Company's lack of
operating history and the prolonged absence of ACA JOE products from the market
place, the need for additional capital, changes in fashion trends, dependence on
key customers and personnel, consumer response to the Company's products and
advertising, and the Company's ability to consummate its proposed acquisition. 
Readers are cautioned not to place undue reliance on forward-looking statements,
which reflect management's analysis only as of the date hereof.  The Company
assumes no obligation to update forward-looking statements.  See also the
Company's annual report on Form 10-KSB and other reports filed from time to time
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934.

PART I    FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                       PACIFIC COAST APPAREL CO., INC.
                                BALANCE SHEET
<TABLE>
<CAPTION>
                                                            DECEMBER 31, 1997      SEPTEMBER 30, 1997
                                                            -----------------      ------------------
   ASSETS
<S>                                                         <C>                    <C>
CURRENT ASSETS
 Cash and cash equivalents                                       $251,118                $406,608
  Due from factors                                               $226,948                $173,577
  Accounts receivable                                             $34,922                 $52,665
  Inventories                                                    $910,501                $865,326
  Prepaid expenses and other current assets                       $41,145                 $17,637
  Note receivable, stockholder                                    $10,000                 $10,000

   Total current assets                                        $1,474,634              $1,525,813

PROPERTY AND EQUIPMENT - at cost, net of                         $130,064                $138,011
 accumulated depreciation

OTHER ASSETS                                                      $21,542                 $19,739
                                                               $1,626,240              $1,683,563

   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable                                                $325,482                $241,303
 Accrued expenses                                                $200,220                $180,992
 Current maturities of long-term debt                            $108,000                 $98,000

    Total current liabilities                                    $633,702                $520,295

LONG TERM DEBT, LESS CURRENT MATURITIES                          $192,804                $230,355

NEGATIVE GOODWILL                                                $169,682                $172,566

STOCKHOLDERS' EQUITY
 Preferred stock
   Authorized, 600,000 shares
   No shares outstanding
 Common stock - no par value                                   $5,452,718              $5,452,718
   Authorized, 1,000,000 shares
   Issued and outstanding 2,958,000 shares
 Additional paid-in capital                                      $479,860                $479,860
 Deficit                                                      ($5,302,526)            ($5,172,231)

   Total stockholders' equity                                    $630,052                $760,347

                                                               $1,626,240              $1,683,563
</TABLE>

                   See notes to condensed financial statements
                                      1
<PAGE>

                       PACIFIC COAST APPAREL CO., INC.
                          STATEMENT OF OPERATIONS


                                                THREE MONTHS ENDED DECEMBER 31
                                                ------------------------------
                                                     1997             1996
                                                -------------    -------------

NET SALES                                        $1,134,521          $66,022

COST OF GOOD SOLD                                   553,793           27,000

GROSS (LOSS) PROFIT                                 580,728           39,022

OPERATING EXPENSES
  Design and production                             127,375           33,559
  Selling                                           195,618           46,293
  Shipping                                           55,926            2,601
  General and administrative                        392,652          296,972
  Interest (income) expense                          19,737           11,199

    Total Operating Expenses                        791,306          390,624

LOSS BEFORE INCOME TAXES                           (210,580)        (351,602)

PROVISION FOR INCOME TAXES                             (800)            (800)

NET LOSS                                          ($211,380)       ($352,402)

NET LOSS PER SHARE                                    (0.07)           (0.12)

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                        2,958,000        3,044,000



                   See notes to condensed financial statements


                                      2


<PAGE>

                                                                    Page 1 of 2

                         PACIFIC COAST APPAREL CO., INC.
                        CONDENSED STATEMENT OF CASH FLOWS

                           INCREASE (DECREASE) IN CASH


                                                 Three Months Ended December 31
                                                 ------------------------------
                                                        1997            1996
                                                        ----            ----

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                           ($211,380)      ($352,402)
  Adjustments to reconcile net loss to 
   cash used by operating activities:
    Depreciation                                        $9,247          $6,000
    Amortization of negative goodwill                  ($2,884)

    Changes in assets and liabilities, net
     of effect of assets and liabilities 
     acquired:
      Increase in due from factors                    ($53,371)       ($31,194)
      Decrease in accounts receivable                  $17,743              $0
      Increase in inventories                         ($45,175)      ($282,000)
      Increase in prepaid expenses and other          ($23,508)       ($79,877)
       current assets                       
      Increase in other assets                         ($1,803)

      Increase in accounts payable                     $84,179        $195,203
      Increase (decrease) in accrued expense           $19,566         ($2,599)

      Total Adjustments                                 $3,994       ($194,467)

      Net Cash Used By Operating Activities          ($207,386)      ($546,869)






                    See notes to condensed financial statements



                                      3

<PAGE>

                                                                    Page 2 of 2

                         PACIFIC COAST APPAREL CO., INC.
                        CONDENSED STATEMENT OF CASH FLOWS

                           INCREASE (DECREASE) IN CASH


                                                 Three Months Ended December 31
                                                 ------------------------------
                                                        1997            1996
                                                        ----            ----

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                   ($1,638)      ($106,907)
  Decrease in short term investments                                  $677,547

    Net Cash (used) Provided by
     Investing Activities                              ($1,638)       $570,640

CASH FLOWS FROM FINANCING ACTIVITIES
  Principal payments on long term debt                ($27,551)
  Reacquisition of common stock                                      ($113,250)

    Net Cash Used by Financing Activities             ($27,551)      ($113,250)

NET DECREASE IN CASH AND CASH EQUIVALENTS            ($236,575)       ($89,479)

CASH AND CASH EQUIVALENTS, beginning as
 previously stated                                    $406,606        $109,907

PRIOR PERIOD ADJUSTMENT                                $81,085

CASH AND CASH EQUIVALENTS, beginning, 
 as restated                                          $487,693        $109,907

CASH AND CASH EQUIVALENTS, ending                     $251,118         $20,428




                    See notes to condensed financial statements



                                      4

<PAGE>

                               PACIFIC COAST APPAREL CO., INC.
              CONDENSED STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION


                                              THREE MONTHS ENDED DECEMBER 31
                                              ------------------------------
                                                    1997          1996
                                              ------------------------------

SUPPLEMENTAL DISCLOSURE OF
   CASH FLOW INFORMATION
   Cash paid during period for:
        Interest                                  $20,179        $11,199
        Income Taxes                                                $800








                        See notes to condensed financial statements


                                      5





<PAGE>

                               PACIFIC COAST APPAREL CO., INC.
                           NOTES TO CONDENSED FINANCIAL STATEMENTS

                                       DECEMBER 31,1997

1 - ACCOUNTING POLICIES

    Although the interim condensed financial statements of the Company are
    unaudited, it is the opinion of the Company's management that all normal
    recurring adjustments necessary for a fair statement of the results have
    been reflected therein.  Operating revenues and net earnings for any 
    interim period are not necessarily indicative of results that may be
    expected for the entire year.

    These statements should be read in conjunction with the financial 
    statements and reflected notes which are incorporated by reference in the 
    Company's Annual Report on Form 10-KSB for the year ended September 30, 
    1997.

2 - PRIOR PERIOD ADJUSTMENT

    Prior period adjustment reflects the correction of an error made in the 
    year ended September 30, 1997 relating to the understatement of cash 
    equivalents due to a clerical error.  Had the error not been made, the 
    net loss and net loss per share would have been decreased by $81,085 and 
    $.03 per share, respectively.





                        See notes to condensed financial statements


                                      6


<PAGE>


                         PACIFIC COAST APPAREL CO., INC.
                 CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY

                          YEAR ENDED SEPTEMBER 30, 1997
                 AND THE THREE MONTHS ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
                                           Common stock           Preferred stock      Additional                     Total
                                       --------------------      ----------------        Paid-in                   Stockholders
                                       Shares        Amount      Shares    Amount        Capital      Deficit        Equity
<S>                                   <C>          <C>           <C>       <C>         <C>          <C>            <C>

Balance, October 1, 1996              3,070,000    $5,920,118                           $162,500    ($2,136,808)    $3,945,810

Issuance of stock for services            9,000        $4,500                                                           $4,500

Reacquisition of stock during
 the year ended September 30, 1997     (121,000)    ($471,900)                          $317,360                     ($154,540)

Net loss for the year ended 
 September 30, 1997                                                                                 ($3,035,423)   ($3,035,423)
                                      ---------    ----------    ------    ------      ----------   ------------   ------------
                                      ---------    ----------    ------    ------      ----------   ------------   ------------
Balance, September 30, 1997,          2,958,000    $5,452,718       0        $0         $479,860    ($5,172,231)      $760,347
 as previously reported                                     

Prior period adjustment, 
 (Note 2)                                                                                               $81,085        $81,085
                                      ---------    ----------    ------    ------      ----------   ------------   ------------
                                      ---------    ----------    ------    ------      ----------   ------------   ------------
Balance, September 30, 1997,          2,958,000    $5,452,718         0        $0       $479,860    ($5,091,146)      $841,432
  as restated
Net loss for the three months
 ended December 31, 1997                                                                              ($211,380)     ($211,380)

                                      ---------    ----------    ------    ------      ----------   ------------   ------------
                                      ---------    ----------    ------    ------      ----------   ------------   ------------
Balance, December 31, 1997            2,958,000    $5,452,718         0        $0       $479,860    ($5,302,526)      $630,052
</TABLE>





                    See notes to condensed financial statements


                                      7


<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

INTRODUCTION

     The Company was formed in April 1995 with the business strategy of
reintroducing the ACA JOE apparel brand through major department stores in the
United States.  The focus has been to capitalize on the strength of the ACA JOE
name and the perceived value of the apparel products.  

     To date, the Company has not been successful placing product in the target
market of the major department store chains.  Lack of success has been due to a
number of factors, including the retailers' comments that the lines that have
been shown since the reintroduction lack specific direction.  The Company feels
that these issues have been addressed and in October hired a previously
successful merchandiser/designer to give new direction to the ACA JOE line.  The
first line developed by the new designer was shown in New York in mid-January
and received positive reaction from retailers.  The true test of the trade's
acceptance will happen later in February when the Company shows the line at the
large men's show in Las Vegas.  No significant shipments of ACA JOE products are
anticipated until June.

     Another factor which has added to the lack of success of the reintroduction
is the continued growth of other men's collections which include Tommy Hilfiger,
Nautica and Polo.  All three of these major collections continue to introduce
additional product lines.  Jeans lines were introduced by these companies in
1997 and consequently floor space available to other brands with less
advertising and marketing dollars continues to shrink.  The buyers are more
likely to give the brands that produce historically above average dollars per
square foot additional floor space for new lines when they are willing to
allocate space to new or less widely distributed resources.  Additionally, many
of the larger department store chains have been focusing more and more in the
development of their own brands which produce higher gross profit dollars.  

     The Company acquired the Cotton Stuff product line in August 1997.  The
Company intends to expand Cotton Stuff sales, while continuing to attempt to
launch the ACA JOE line.

RESULTS OF OPERATIONS

QUARTER ENDED DECEMBER 31, 1997

     Revenues for the quarter ended December 31, 1997 were $1,134,621 compared
to $66,022 for the comparable prior year's quarter.  The significant increase in
revenues reflects the Company's acquisition of the Cotton Stuff brand, in that
all but $92,492 of the current quarter's revenues related to Cotton Stuff. 
Gross profit for the quarter was $580,726, compared with $39,022 in the quarter
ended December 31, 1996, reflecting the 

                                      8

<PAGE>

addition of the Cotton Stuff revenues. The Company's total expenses for the 
quarter ended December 31, 1997 were $771,571, compared to $390,602 for the 
quarter ended December 31, 1996.  The increase over the prior year primarily 
reflects an increase in selling, design and general and administrative 
expenses attributable to the Cotton Stuff men's and women's line and the 
continued development of the ACA JOE line.  The increase in design and 
production is attributable to the direction change in ACA JOE. The new ACA 
JOE line introduced in January reflects a slightly lower price point, making 
the retail price points more moderate.  The Company believes that operating 
expenses as a percentage of sales will continue to decrease as the Company 
begins shipping the new ACA JOE line and the newly redesigned Cotton Stuff 
men's line.  There can be no assurance, however, the Company will operate 
profitably in the future.  

QUARTER ENDED DECEMBER 31, 1996

The results of the quarter ended December 31, 1996 reflect the continued
development of the ACA JOE brand.  Revenues during the quarter reflect several
small initial shipments to target customers.  Expenses during the period reflect
costs associated with the development of administrative and operations staff,
sales organization and marketing, along with design and production of the
initial line.

LIQUIDITY AND CAPITAL RESOURCES

     In September 1996, the Company realized net proceeds of approximately
$5,267,000 from an initial public offering of common stock and warrants to
purchase common stock.  A portion of these proceeds was used to repay the
approximately $550,000 of indebtedness then outstanding. The Company has 
experienced cumulative losses from operations of $5,302,526 for the period 
from April 28, 1995 (inception) through December 31, 1997.

     The August 1997 acquisition of Cotton Stuff was designed to provide a
revenue base for the Company from which to grow both the ACA JOE and Cotton
Stuff lines. Due to the continued lack of sales of the ACA JOE products,
however, the revenues from Cotton Stuff alone are not sufficient to sustain the
Company.  At December 31, 1997, the Company's cash and equivalent balance was
approximately $251,000, and $227,000 was due from the Company's factor.  

     At its currently projected level of operations, the Company will require
additional capital sometime during the quarter ending March 31, 1998.  In order
to sustain operations until such time as positive cash flow can be achieved, the
Company is considering available alternatives, including a strategic alliance.  
In addition, the Company is implementing staff reductions and other cost cutting
measures.  The Company also may seek to fund its operations through public or
private offerings of securities, with collaborative or other arrangements with
corporate partners or from other sources.  Additional financing may not be
available when needed or on terms acceptable 

                                      9

<PAGE>

to the Company.  The Company may be required to delay, scale back or 
eliminate certain of its development programs, to relinquish rights to 
certain of its products, or to license to third parties the right to 
commercialize products the Company would otherwise seek to develop itself.

     The Company incurred an adverse judgment totalling approximately $50,000 in
a recent arbitration.  In addition, the Company has been threatened with
litigation relating to its June 1996 financing.  The Company does not believe
these claims are meritorious, and the Company does not have the funds necessary
to pay any such claims.

     In November 1996, following a decline in the market price of the Company's
common stock, the Board authorized the Company's purchase of up to 150,000
shares of its common stock.  From December 1996 to March 1997, the Company
purchased 116,000 shares for a total of $145,790 ($1.258 per share).  Management
believes these purchases were in the best interests of the Company and its
shareholders at the time, but at present there are no plans to purchase any
additional shares.


PART II   OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

          (d)  Use of Proceeds

          The following table sets forth the approximate use through December
31, 1997 of the $5,267,000 net proceeds of the Company's August 1996 initial
public offering.  

           DESIGN AND PRODUCTION OF DISPLAY FEATURES             $  113,000
           DEVELOPMENT AND FIXTURE OF CITADEL OUTLET STORE       $   24,000
           NATIONAL MARKETING PROGRAM                            $  186,000
           RETIREMENT OF BRIDGE PROMISSORY NOTES                 $  417,000
           RETIREMENT OF OFFICER LOANS                           $   32,000
           REPAYMENT OF WORKING CAPITAL LOANS                    $  101,000
           EXPENSE INCURRED IN CONJUNCTION WITH
               PURCHASE OF COTTON STUFF                          $  604,000
           REPURCHASES OF COMMON STOCK                           $  145,790
           WORKING CAPITAL AND GENERAL
               CORPORATE PURPOSES                                $3,393,210
           TOTAL                                                 $5,016,000
           BALANCE                                               $  251,000

                                      10

<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

               27.  Financial Data Schedule

          (b)  Reports on Form 8-K.

               During the quarter ended December 31, 1997, the Company filed 
Form 8-K/A dated December 1, 1997, containing (in Item 7) financial information
regarding the acquired assets of Cotton Stuff, Inc.

                                      11

<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.




                                     Pacific Coast Apparel Company, Inc.

                                     By      /s/ Terrence L. McGovern
                                        --------------------------------
                                               Terrence L. McGovern
                                            Chief Executive Officer and 
                                              Chief Financial Officer

February 5, 1998

                                      12