PART I.     FINANCIAL INFORMATION
<TABLE>
<CAPTION>

Item 1.      FINANCIAL STATEMENTS

                                      AJAY SPORTS, INC. AND SUBSIDIARIES
                                          CONSOLIDATED BALANCE SHEETS
                                               (IN THOUSANDS)


                                                                March 31, 1999               December 31,
                                                                 (Unaudited)                     1998
<S>                                                          <C>                           <C>

ASSETS                                                                      -                           -

Current assets:
     Cash                                                     $            27              $            6
     Marketable  securities                                               418                         396
     Trade accounts receivable, net                                     3,351                       1,889
     Inventories                                                        5,882                       5,680
     Prepaid expenses and other                                           597                         485
                                                                            -                           -
                    Total current assets                               10,275                       8,456

Fixed assets, net                                                       1,656                       1,708
Other assets                                                              142                         179
Deferred tax benefit                                                    1,119                       1,119
Goodwill                                                                1,610                       1,621
                                                                            -                           -
                   Total assets                               $        14,802              $       13,083
                                                                            =                           =

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Notes payable to banks                                  $           195              $          195
      Current portion of capital lease                                      4                           4
      Accounts payable                                                  2,268                       2,225
      Accrued expenses                                                    567                         380
                                                                            -                           -
                    Total current liabilities                           3,034                       2,804

Notes payable to affiliates - long term                                 1,587                       1,587
Notes payable to banks  -  long term                                    7,856                       5,951

Stockholders' equity:
      Preferred stock, 10,000,000 shares authorized,  
       Series B, $0.01 par value, 12,500 shares outstanding
          at liquidation value                                          1,250                       1,250
       Series C, $0.01 par value, 264,177 shares
          outstanding at stated value                                   2,642                       2,642
       Series D, $0.01 par value, 6,000,000 shares                         60                          60
      Common stock, $.01 par value 100,000,000 shares authorized,
                 3,956,815 shares outstanding                              40                          40
Additional paid-in capital                                             14,766                      14,762
Accumulated deficit                                                   (16,472)                    (16,006)
Accumulated unrealized (losses) gains on securities                        39                          (7)
                                                                            -                           -
                                                                   ------------               -------------
            Total stockholders' equity                                  2,325                       2,741
                                                                   ------------               -------------
            Total liabilities and stockholders' equity        $        14,802              $       13,083
                                                                   ============               =============

</TABLE>


                                       2

<PAGE>


                       AJAY SPORTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)



                                                       Three  Months
                                                       Ended March 31,
                                              1999                      1998
                                           ------------             ------------

Net sales                                $        4,263           $       7,598

Cost of sales                                     3,595                   6,330

      Gross profit                                  668                   1,268

Selling, general and                                851                   1,028
   administrative expenses
      Operating income  (loss)                     (183)                    240

Non-operating expense:
      Interest expense, net                         253                     335
      Other, net                                     26                    (136)
                                             -----------            ------------
      Total non-operating expense                   279                     199
                                             -----------            ------------
Income (loss) before income taxes                  (462)                     41

Income tax expense (benefit)                          -                       -
                                             -----------            ------------
Net income (loss)                         $        (462)           $         41
                                             ============           ============
Basic and diluted earnings per share *    $       (0.14)           $      (0.01)
                                             ============           ============

Weighted average common shares
outstanding                                       3,957                   3,879
                                             ============           ============

Net income (loss) as reported above                (462)                     41
Undeclared cumulative preferred dividends           (91)                    (99)
                                            -------------           ------------
Loss applicable to common stock          $         (553)           $        (58)
                                            =============           ============





*   Computed by dividing net income or loss, after reduction for preferred stock
    dividends, by the weighted average number of common shares outstanding.


                                       3
<PAGE>
<TABLE>
<CAPTION>

                                   AJAY SPORTS, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (IN THOUSANDS), (UNAUDITED)



                                                                                                  Three  Months
                                                                                                Ended  March 31,
                                                                                         1999                    1998
                                                                                       --------                --------
<S>                                                                                    <C>                     <C>
Cash flows from operating activities:

     Net income  (loss)                                                               $    (462)               $     41
      Adjustments to reconcile to net cash flows from
      operating activities:
           Depreciation and amortization                                                     95                     101
      Change in assets [(increase)/decrease] and
       liabilities [increase/(decrease)]:
           Trade accounts receivable, net                                                (1,462)                   (939)
            Inventories                                                                    (202)                   (367)
            Prepaid expenses and other current assets                                      (112)                      -
            Other assets                                                                      3                    (155)
            Deferred tax benefits                                                             -                       -
            Accounts payable                                                                 43                     796
            Accrued expenses                                                                187                      25
                                                                                                                     -
                                                                                        --------                ---------
                   Net cash used in operating activities                                 (1,910)                   (498)
                                                                                        --------                ---------
Cash flows from investing activities:
       Acquisitions of fixed assets                                                         (19)                    (23)
                                                                                        --------                ---------

                    Net cash used in investing activities                                   (19)                    (23)
                                                                                        --------                ---------
Cash flows from financing activities:
        Proceeds from notes payable to affiliates                                             -                      12
        Net change in note payables to banks                                               1,904                     374
        Net change in marketable securities                                                  46                       -
                                                                                        --------                ---------

                     Net cash provided by  financing activities                           1,950                     386
                                                                                        --------                ---------
Net increase (decrease) in cash                                                              21                    (135)
Cash at beginning of period                                                                   6                     234
                                                                                        --------                ---------
Cash at end of period                                                                 $      27                $     99
                                                                                        ========                =========
Supplemental disclosures of cash flow information:
       Cash paid for interest                                                         $     254                $    286
                                                                                        ========                =========
       Cash paid for income tax                                                               -                       -
                                                                                        ========                =========



</TABLE>


                                       4
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


This report contains forward-looking  statements including statements containing
words such as "believes", "anticipates",  "expects" and the like. All statements
other than  statements  of  historical  fact included in this report are forward
looking statements.  The Company believes that its expectations reflected in its
forward looking statements are reasonable, but it can give no assurance that the
expectations  ultimately will prove to be correct.  Important factors including,
without limitation, statements relating to planned acquisitions,  development of
new products,  the financial  condition of the Company,  the ability to increase
distribution  of the Company's  products,  integration of businesses the Company
has  acquired,  disposition  of any  current  business of the  Company,  and the
Company's  relationship with Williams Controls,  Inc., a related company,  could
cause the Company's actual results to differ  materially from those  anticipated
in these forward-looking  statements.  The Company does not intend to update the
forward looking statements contained in this report.


1.    BASIS OF PRESENTATION

The  condensed  consolidated  financial  statements  included  herein  have been
prepared by Ajay Sports,  Inc. (the "Company") without audit and pursuant to the
rules and regulations of the Securities and Exchange Commission.  In the opinion
of the Company, the financial statements reflect all material adjustments, which
consist only of normal  recurring  adjustments,  necessary to present fairly the
financial  position  of the  Company  at  March  31,  1999  and the  results  of
operations  for the  three-month  periods  ended March 31, 1999 and 1998 and the
cash flows for the same three-month periods.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to the SEC rules and regulations dealing
with  interim  financial  statements.  However,  the Company  believes  that the
disclosures  made in the  condensed  financial  statements  included  herein are
adequate to make the  information  presented  not  misleading.  These  condensed
financial statements should be read in conjunction with the financial statements
and notes thereto  included in the Company's  Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.

The year-end  condensed  balance  sheet data was derived from audited  financial
statements,  but does not include all disclosures required by generally accepted
accounting principles.

The interim period results are not  necessarily  indicative of results which may
be  expected  for any other  interim  or for the full  year.  Certain  costs are
estimated for the full year and  allocated to interim  periods based on activity
associated with the interim period. Accordingly,  such costs are subject to year
end adjustment.



                                       5

<PAGE>





2.    INVENTORIES

The major classes of inventories (rounded to thousands) are as follows:


                                  March 31,1999          December 31,1998

    Raw Materials                   $1,439                   $1,493

    Work in Process                  1,301                    1,052

    Finished Goods                   3,142                    3,135
                                   ---------                ---------
                                    $5,882                   $5,680
                                   =========                =========

3.    NOTES PAYABLE TO BANKS


On February 2, 1999, the Company  entered an agreement with Wells for a seasonal
over  advance of up to $750,000  beginning  February  2, 1999.  Half of the over
advance, or up to $375,000, is due to Wells by June 1, 1999 with the other half,
or up to $375,000,  due to Wells by July 1, 1999.  The interest rate on advances
outstanding  on the over  advance is prime plus 2%. The Company does not believe
it will have the funds to repay the over advance due on June 1, 1999 and July 1,
1999 and has requested an extension of the over advance.  The over advance would
be paid back with the collection of seasonal trade accounts receivable.


4.    SEGMENT INFORMATION

The contribution to net sales,  operating income (loss) and identifiable  assets
of the Company's two industry  segments for the quarter ended March 31, 1999 and
1998 (unaudited) are as follows (in thousands):

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

                          Quarter Ended March 31, 1999
                    ----------------------------------------------------------


                                 GOLF

                                 Mass       Specialty
                    Furniture    Merchant   Golf Stores Corporate Consolidated
                    ---------    --------   ----------- --------- ------------

Net Sales           $  2,268     $ 1,954    $     41    $     -    $  4,263

Operating                316        (310)        (35)      (154)       (183)
Profit/(Loss)

Total Assets           4,019       8,997       1,786          -      14,802

Depreciation/             24          58          13          -          95
Amortization

Capital                   19           -           -          -          19
Expenditures

                                       6
<PAGE>

------------------------------------------------------------------------------
                          Quarter Ended March 31, 1998
------------------------------------------------------------------------------

                                 GOLF

                                 Mass       Specialty
                    Furniture    Merchant   Golf Stores Corporate Consolidated
                    ---------    --------   ----------- --------- ------------

Net Sales           $  1,760     $   520     $     -    $      -   $  7,598

Operating                220         273        (110)       (143)       240
Profit/(Loss)

Total Assets           2,930      12,061       2,872           -     17,863

Depreciation/             26          55          20           -        101
Amortization

Capital                   23           -           -           -         23
Expenditures
------------------------------------------------------------------------------


5.    DIVIDENDS

Dividends on Series B and C Convertible  Preferred  Stock have not been declared
in 1998 or 1999 due to  unavailability  of funds.  Dividends are permitted to be
paid under the Wells loan  agreement  when  sufficient  funds become  available.
Dividends are in arrears on Series B in the amount of $1,031,575 and on Series C
in the amount of $642,218.

                                       7
<PAGE>