SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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

For the fiscal year ended December 31, 1999      Commission File Number: 0-21089


                             GOLDEN BEAR GOLF, INC.
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             (Exact name of Registrant as specified in its charter)

             FLORIDA                                   65-0680880
---------------------------------        ---------------------------------------
 (State or other jurisdiction of         (I.R.S. Employer Identification Number)
 incorporation or organization)


 11780 U.S. HIGHWAY ONE, NORTH PALM BEACH, FLORIDA           33408
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     (Address of principal executive offices)              (Zip Code)

                                 (561) 626-3900
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              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  NONE.

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

                 CLASS A COMMON STOCK, $.01 PAR VALUE PER SHARE
--------------------------------------------------------------------------------
                                (Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__  No____

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

The aggregate market value of Class A Common Stock held by non-affiliates of the
Registrant as of March 22, 2000 was $1,557,070. The Registrant had outstanding
2,744,962 shares of Class A Common Stock (par value $.01 per share) and
2,760,000 shares of Class B Common Stock (par value $.01 per share) as of March
22, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL

Golden Bear Golf, Inc., together with its wholly owned subsidiaries
(collectively, "Golden Bear" or the "Company"), is engaged in the development,
marketing and management of golf-related businesses including the licensing,
distribution and sale of golf-related consumer products, the operation of golf
instructional schools and the licensing of golf practice and instruction
facilities. Through its various operating units, the Company provides high
quality products and services with trade marks registered in over 40 countries,
primarily under the NICKLAUS, JACK NICKLAUS and GOLDEN BEAR brand names.

The Company was formed on June 7, 1996 to enter into an exchange agreement which
was consummated on August 1, 1996 upon the closing of an initial public offering
of the Company's Class A Common Stock. Parties to the plan of reorganization
included, among others, the Company's affiliates, Golden Bear Golf Centers, Inc.
("Golf Centers"), Paragon Construction International, Inc. ("Paragon")
(collectively, the "Constituent Companies") and Golden Bear International, Inc.
("International"), a privately owned company controlled by Jack Nicklaus.
Pursuant to the exchange agreement, the Company acquired all of the outstanding
common stock of the Constituent Companies in exchange for shares of its Class A
and Class B Common Stock. In addition, the Company acquired certain assets and
assumed certain liabilities of International in exchange for shares of the
Company's Class B Common Stock. The transaction was accounted for on a
historical cost basis in a manner similar to a pooling of interests as Golden
Bear and the Constituent Companies had common stockholders and management.
Although Jack Nicklaus and his family beneficially holds 91.7% of the total
voting power of the Company's outstanding Common Stock, the Company has no
equity interest in International.

In 1998, the Company sold Golf Centers and discontinued the construction
operations conducted by Paragon. Accordingly, the operations and financial
activity associated with such businesses have been reclassified as discontinued
operations. The Company's continuing businesses include the licensing of
NICKLAUS, JACK NICKLAUS and GOLDEN BEAR branded products throughout the world,
the operation of the NICKLAUS FLICK GAME IMPROVEMENT and the generation of
marketing fees related to Jack Nicklaus' personal endorsements. In addition, the
Company has a joint venture agreement with Weitz Golf International LLC ("Weitz
Golf"), a construction company, pursuant to which the Company for a fee provides
marketing assistance in connection with golf course construction activities
offered by Weitz Golf.

LICENSING

The Company manages Jack Nicklaus' brands and marketing relationships. The
Company's activities include the licensing and marketing of a wide variety of
Jack Nicklaus branded consumer products and services, primarily under the
NICKLAUS, JACK NICKLAUS, and GOLDEN BEAR brand names.

The Company currently licenses the Jack Nicklaus brands to more than 15
companies that distribute products in over 25 countries. The largest markets for
the Company's branded products currently are the United States, Korea and Japan.
Licensed product categories include men's and women's sportswear, men's tailored
clothing, neckwear, luggage, socks, headwear, belts, small leather goods,
eyewear, furniture, calendars, and various forms of artwork and commemoratives.

The Company's licensing of apparel in the Far East is conducted exclusively
through Jack Nicklaus Apparel International ("JNAI"), a joint venture with an
affiliate of Hartmarx Corporation. This joint venture has in turn entered into
separate licensing arrangements through partnerships relating to Japan ("JNJ")
and the rest of Asia ("JNAI/FE"). Pursuant to such arrangements, JNAI receives
from 3% to 5% royalty fees from JNJ's Nicklaus' product sales and approximately
4% to 5% of royalty fees from JNAI/FE's Nicklaus' product sales.

                                       2
<PAGE>

The following table sets forth the Company's principal licensees and products:
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------
                                                                       Licensed                           Licensee
Licensee                          Products                             Brands           Territories       Since
---------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                  <C>              <C>               <C>
Hart, Schaffner & Marx,           Slacks, sportscoats, blazers,        Jack Nicklaus    United States     1969
  a business unit of Hartmarx     woven dress shirts
  Corporation
---------------------------------------------------------------------------------------------------------------------
Trans-Apparel Group,              Men's and women's shirts, slacks,    Nicklaus         North America     1990
  a business unit of Hartmarx     shorts, blazers, socks,              Golden Bear      Europe
  Corporation                     sweatshirts, outerwear, rainwear,
                                  headwear
---------------------------------------------------------------------------------------------------------------------
The Rockport Corporation          Casual and dress shoes, golf shoes   Jack Nicklaus    Worldwide         1992
                                                                       Golden Bear
---------------------------------------------------------------------------------------------------------------------
Brookville Corporation            Neckwear                             Nicklaus         United States     1995
---------------------------------------------------------------------------------------------------------------------
Drexel Heritage, Inc.             Furniture                            Nicklaus         North America     1997
---------------------------------------------------------------------------------------------------------------------
JNAI:                             Men's and women's sportswear         Jack Nicklaus    Japan             1973
  Partnership with                                                     Nicklaus         Southeast Asia
  Hartmarx Corporation                                                 Golden Bear      Australia
                                                                                        South Africa
                                                                                        South America
---------------------------------------------------------------------------------------------------------------------
JNAI/FE:                          Men's and women's sportswear and     Jack Nicklaus    Thailand          1973
  Partnership between JNAI        accessories                          Nicklaus         Indonesia
  and Kosugi Sangyo to                                                 Golden Bear      Korea
  license Jack Nicklaus                                                                 Malaysia
  brands in Asia                                                                        Singapore
                                                                                        Philippines
---------------------------------------------------------------------------------------------------------------------
JNJ:                              Men's, women's and children's        Jack Nicklaus    Japan             1995
  Partnership between JNAI        sportswear, hats, ties, gloves,      Nicklaus
  and Kosugi Sangyo to            belts, luggage, casual and           Golden Bear
  serve as master apparel         business bags and eyewear            Muirfield
  licensee in Japan
---------------------------------------------------------------------------------------------------------------------
</TABLE>
GOLF CENTERS AND ACADEMIES

The Company licenses its GOLDEN BEAR GOLF CENTERS, JACK NICKLAUS GOLF CENTERS
and JACK NICKLAUS ACADEMY OF GOLF programs to licensees which operate golf
practice and instruction facilities. These programs are designed to provide golf
practice opportunities, affordable golf instruction and related recreational
activities at such facilities. As of the beginning of 1998, the Company had one
unaffiliated licensee that operated seven GOLDEN BEAR GOLF CENTERS. On July 20,
1998, the Company sold Golf Centers, which owned and operated a total of 14 golf
center facilities under the GOLDEN BEAR GOLF CENTERS brand name, to this
licensee. In connection with the sale, the Company entered into a licensing
agreement with this licensee granting it the right to continue operating the
acquired golf centers under the GOLDEN BEAR GOLF CENTERS brand name.
Accordingly, there are currently 21 licensed GOLDEN BEAR GOLF CENTERS in the
United States that are operated by one owner. Licensing terms associated with
the original seven facilities operated by this licensee were merged into the
agreement governing the 14 acquired centers. The Company is entitled to receive
minimum annual licensing fees in the aggregate of $795,000 payable in equal
quarterly installments, along with certain additional incentive compensation
based on the achievement of certain defined target annual revenue levels by the
licensed facilities. Pursuant to the agreement, in the year ended December 31,
1999, the licensee paid the Company $795,000. The licensing agreement has a term
that expires on December 31, 2008, although the licensee may elect to

                                       3
<PAGE>

terminate the agreement effective December 31, 2000. During 1999, the licensee
experienced financial difficulties and there is no assurance that the Company
will continue to receive the licensing fees under the agreement.

The Company has entered into license agreements for the development and
operation of golf center facilities outside of the United States under the brand
names JACK NICKLAUS GOLF CENTER and JACK NICKLAUS ACADEMY OF GOLF. The latter
generally provides more substantial practice facilities and practice golf holes
on a larger site. In some territories, the Company has granted a master license
for a country or region that gives the master licensee the exclusive right
within defined territories to own, operate or sublicense to others the right to
own and operate golf centers and golf academies in the territory. In other
cases, the Company has granted a site specific license giving the site licensee
the right to open a single golf center or golf academy at a specific location.
The Company generally has granted its foreign licensees an exclusive radius
around the site of each facility. The Company's foreign licensees currently have
eight operating facilities located in Japan, England, Spain and Australia. The
Company intends to continue to support its existing licensee network.

Set forth below is a list of the Company's existing domestic licensees and the
location of the golf practice and instruction facilities operated by them.

     LICENSEE GROUP                     LOCATION OF FACILITIES
     --------------              ---------------------------------------------
     Family Golf Centers, Inc.   Henrietta, NY             Pittsburgh, PA
                                 Farmingdale, NY           Dayton, OH
                                 Elmsford, NY              Columbus, OH
                                 Douglaston, NY            Royal Oak, MI
                                 Liverpool, NY             Plymouth, MI
                                 Williamsville, NY         College Park, MD
                                 Tom's River, NJ           Lake Park, FL
                                 Wayne, NJ                 Fort Lauderdale, FL
                                 Pittsburgh, PA            Carrollton, TX
                                 Moreno Valley, CA         El Segundo, CA
                                 Beaverton, OR

     KRIM & Associates, LLC      Albany, NY

MARKETING

The Company has developed two types of "marketing partnerships" with selected
companies worldwide. These partnerships involve either Mr. Nicklaus' personal
endorsement and use of his likeness or strategic marketing alliances that
utilize golf and the Company's marketing access to high-end golf consumers. Such
marketing partnerships involving Nicklaus' personal endorsement have been
established with, among others, Lincoln-Mercury, a division of Ford Motor
Company, Textron, Golf Magazine and Maxfli. Such partnerships are believed to
increase the exposure and reinforce the image of Mr. Nicklaus in the Company's
target markets.

The Company receives a percentage of all revenues received by Mr. Nicklaus for
personal endorsement services. Through these marketing efforts, the Company
receives (i) 30% of all such revenues under any contract or arrangement existing
as of the reorganization of the Company on August 1, 1996 or any renewal thereof
and (ii) no less than 20% of all such revenues received under any new contract
or arrangement. The Company receives 100% of any revenues associated with
strategic marketing alliances. Such marketing alliances have been established
with companies such as VISA, Pepsi and Citigroup.

The Company's marketing and licensing strategy is to (i) expand the worldwide
sales of the Company's products; (ii) selectively expand its licensed product
lines; (iii) work with existing licensees to maximize brand advertising and
promotional exposure; and (iv) develop new licensing relationships for product
categories that are appropriate for Jack Nicklaus brands. There is no assurance
that these strategies will be successful or that these objectives will be
achieved.

                                       4
<PAGE>

NICKLAUS FLICK GAME IMPROVEMENT

The Company operates golf schools principally under the NICKLAUS FLICK GAME
IMPROVEMENT ("NFGI") brand name. Jack Nicklaus and Jim Flick, a world renowned
instructor, collaborated to develop a program that has been recognized by major
golf publications for its leadership role in the golf instruction industry since
the school's inception in 1991. The Company has developed a proprietary teaching
methodology that includes instruction workbooks and also utilizes computerized
video technology to provide enhanced swing analysis. The NFGI offers more than
130 golf instruction programs including several specialty programs targeted at
women, corporations and special alumni groups. NFGI currently operates as an
independent contractor at four resort clubs located in the United States and
Mexico. The target market for the NFGI retail schools are consumers that have
significant disposable income. The Company started a moderately priced golf
school program under the NICKLAUS FLICK FAULTS & CURES brand name in 1997 and
commenced operation of a premium priced school exclusively for women under the
program name of FOR WOMEN ONLY in 1998. The Company currently markets retail
schools principally through: (i) direct response media advertising; (ii) direct
mail programs targeted at NFGI graduates and high net worth golfers; (iii)
word-of-mouth referrals; and, (iv) telemarketing.

The NFGI teaching faculty currently is comprised of 30 teaching professionals
selected by Jim Flick. Most of the instructors are independent contractors and
their agreements with NFGI are negotiated annually. In addition to its regular
one, two and three-day consumer packages, NFGI provides businesses and
corporations a wide range of program alternatives, including three-day executive
golf programs, one-day golf outings, charity golf events and hospitality
programs at select professional tour events. These corporate programs, which
operate under the brand name NICKLAUS FLICK EXECUTIVE GOLF, are designed
specifically for corporations.

OTHER OPERATIONS

WEITZ GOLF INTERNATIONAL

The Company has an agreement with Weitz Golf, a construction company focused on
building golf courses and clubhouses nationally and internationally. Under the
terms of the agreement, Golden Bear, International and Jack Nicklaus will
provide certain technical and marketing assistance in connection with the
construction services offered by Weitz Golf, which offers general contracting,
design-build and construction management. The principal markets targeted for
these services are developers and designers in the golf industry. Under the
agreement, Golden Bear is entitled to receive fees based upon the cumulative
profitability of Weitz Golf's operations and agreed to no longer offer
construction services directly during the term of the agreement.

JACK NICKLAUS INTERNATIONAL GOLF CLUB

The Jack Nicklaus International Golf Club ("Golf Club") was founded in 1995 to
provide additional benefits to members of Nicklaus designed golf courses. The
Golf Club is a proprietary membership club that offers its members an
opportunity to obtain a variety of member services, including golf playing
privileges at prestigious private clubs worldwide that feature a Nicklaus
designed golf course. Membership in the Golf Club is restricted to members of
the golf clubs that agree to participate in the program. There are currently
approximately 100 participating clubs. Members enjoy reciprocal playing and
guest privileges at each of the participating clubs. The current membership fee
is $295 per year. There is no membership fee to the participating clubs and each
participating club is permitted to impose a direct charge for golf playing
privileges extended to Golf Club members.

DISCONTINUED OPERATIONS

The Company sold the stock of its wholly-owned Golf Centers subsidiary on July
20, 1998. In connection with the sale, the Company entered into a licensing
agreement with the purchaser granting such purchaser the right to continue
operating the acquired golf centers under the GOLDEN BEAR GOLF CENTER brand
name. The Company retained its licensing and franchising rights with respect to
being able to offer franchise opportunities to outside parties for the operation
of golf instruction and practice facilities. In this regard, Golf Centers
distributed certain of its assets and liabilities to the Company prior to the
closing of the sale. All of the financial activities associated with the
operations that were sold have been classified as discontinued operations.

                                       5
<PAGE>

On October 26, 1998, Golden Bear's Board of Directors approved the
discontinuance of the construction operations conducted by Paragon. All such
projects have been completed and the Company is no longer actively involved in
pursuing construction projects independent of its agreement with Weitz Golf. The
operations and financial activity associated with Paragon have been classified
as discontinued operations. With respect to the construction operations formerly
conducted by Paragon, the Company has entered into agreements to settle certain
claims asserted against it related to certain of its former construction
projects. Such claims involved certain project owners, as well as construction
vendors and subcontractors associated with Paragon's discontinued construction
operations.

COMPETITION

The Company's competition varies among its business lines. The consumer markets
for goods and services in which Golden Bear's marketing and licensing operations
compete are extremely competitive. The Company's products and services compete
against a mix of established brand name consumer products and services, products
and services licensed or endorsed by sports and entertainment celebrities,
private-label products and generic products that have not established a distinct
brand identity. Competition in these products and services is primarily centered
on styling, quality, price, brand recognition and service.

In order for the Company to remain competitive in these marketplaces, the
Company must effectively maintain and promote the unique brand image of its
services and its licensed products and establish strong marketing relationships
with manufacturers and distributors of products that enhance the brand image.
The Company and its licensees compete with a number of manufacturers and
marketers of sporting goods, recreational products, apparel and other consumer
products and services. Many of these competitors have substantially greater
resources than the Company and its licensees. In addition, these competitors
have recognized brand names and broader and more established distribution
networks. These markets also face competition from other leisure and
recreational activities, and sales of leisure and recreational products and
services are affected by changes in consumer preferences, which are difficult to
predict.

EMPLOYEES

As of December 31, 1999, the Company had approximately 39 employees. The Company
has no collective bargaining agreements covering any of its employees, has not
experienced any material labor disruption and is unaware of any efforts or plans
to organize its employees. The Company considers relations with its employees to
be satisfactory.

INTELLECTUAL PROPERTY RIGHTS

The Company licenses the NICKLAUS, JACK NICKLAUS and GOLDEN BEAR brand names
from International. The public identification of these brands, which the Company
believes are well recognized and well regarded by consumers, has been developed
historically through their association with the personal rights of Jack Nicklaus
as a living individual to commercialize his personality under common law and
various statutes enacted in certain domestic states and foreign countries. The
Company has obtained the exclusive royalty-free rights from International to
utilize and license the major trademarks and service marks that have been
previously developed under common law, including marks previously registered in
the United States and various foreign countries in which products or services
currently are sold by the Company and its licensees. Subject to the approval of
International, the Company also has the right to obtain the registration of
additional trademarks and service marks for the future expansion of its
businesses. The Company also has the rights to utilize certain customer lists,
trade secrets, know-how, and certain copyrighted materials necessary or useful
in the conduct of its business, including certain intellectual property.

                                       6
<PAGE>

GOVERNMENTAL REGULATION

The Company's former golf centers operations and its golf course construction
activities are subject to various federal, state, local and foreign laws and
regulations designed to protect the environment from waste emissions, the
handling, treatment and disposal of solid and hazardous wastes and the
remediation of contaminates associated with the use and disposal of hazardous
substances. Although the Company believes that it is and has been in substantial
compliance with all such laws, ordinances and regulations applicable to these
operations, there may be environmental liabilities or conditions associated with
such activities of which the Company is not aware. Accordingly, there can be no
assurance that future compliance with such requirements will not have a material
adverse effect on the Company's financial condition.

The Company is also subject to the Federal Occupation Safety and Health Act and
other laws and regulations affecting the safety and health of employees.
Further, the Company is subject to the Fair Labor Standards Act and various
state laws governing such matters as minimum wage requirements, overtime and
other working conditions and citizenship requirements. The Company is also
subject to foreign immigration, labor, safety and environmental laws in those
jurisdictions where it performs services.

ITEM 2.  PROPERTIES

The Company's principal executive and administrative offices are located in
North Palm Beach, Florida in approximately 11,000 square feet of space leased
under an agreement with a term that expires in 2007. The Company considers its
executive and administrative offices to be adequate and suitable for its current
needs.

ITEM 3.  LEGAL PROCEEDINGS

In August 1995, Paragon brought an arbitration claim against a customer for
breach of contract. Paragon alleges it has properly completed the construction
relating to the renovation of the customer's golf course and is seeking final
payment of retainage and related amounts due, together with additional damages,
totaling approximately $350,000. Simultaneous to this claim of arbitration, the
customer filed a counterclaim of arbitration against Paragon for alleged
construction defects in the renovation of its golf course. Although the customer
now claims its damages are in excess of $3.0 million, the initial claim
submitted by the customer in arbitration was for $750,000. The ultimate outcome
of this matter is not determinable at this time. Accordingly, no provision for
loss regarding this matter had been established at December 31, 1999. The
ultimate disposition of this matter is not expected to have a material effect on
the Company's financial position or results of operations.

Based on a comprehensive review conducted by the Company during 1998 of its
Paragon subsidiary's construction projects, it was necessary for the Company to
restate certain financial statements it had previously filed with the Securities
and Exchange Commission. Following the Company's announcement that its financial
statements needed to be restated, a number of class action complaints were filed
against the Company and certain of its current and former officers and directors
and the former president of one of its subsidiaries. One of the class action
complaints also named Arthur Andersen LLP ("Andersen") the Company's independent
certified public accountants, as a defendant. Those class actions were
transferred to the United States District Court for the Southern District of
Florida and that court entered an order consolidating the actions, designating
class representatives and appointing class counsel pursuant to the provisions of
the Private Securities Litigation Reform Act.

On December 24, 1998, the plaintiffs filed their first Consolidated Class Action
Complaint, naming as defendants Golden Bear, Jack W. Nicklaus, Richard P.
Bellinger, Jack P. Bates, Stephen S. Winslett, John Boyd and Andersen. The
Consolidated Complaint alleged claims for violations of Section 10(b) and 20(a)
of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5
promulgated thereunder. The Consolidated Complaint asserted claims on behalf of
a class consisting of all persons, excluding the defendants and certain related
persons or entities, who purchased shares of the Company's Class A Common Stock
during the period from April 30, 1997 through and including July 27, 1998.

                                       7
<PAGE>

On December 22, 1999, the parties entered into a Settlement Agreement relating
to the consolidated actions. In connection with the settlement, the plaintiffs
filed a motion to allow the filing of their Second Amended Consolidated
Complaint on behalf of a class of all persons, excluding the defendants, who
purchased shares of the Company's Class A Common Stock from the date of the
Company's public offering, August 1, 1996 through and including July 27, 1998.
The Amended Consolidated Complaint includes allegations of securities law
violations under Sections 11, 12(2) and 15 of the Securities Act of 1933,
Sections 10(b) and 20(a) of the Securities Act and Rule 10b-5, as well as common
law claims.

Under the terms of the Settlement Agreement, the Company has established a
settlement fund in the amount of $3.5 million to settle the class action
litigation. The Company contributed $2.5 million to the settlement fund, this
amount was funded by the Company's insurance carrier. Pursuant to the Settlement
Agreement, Andersen also contributed $1.0 million to the settlement fund. In
addition, the Company has agreed to take the steps necessary to acquire all the
shares held by public shareholders at a cash price of $0.75 per share. The price
for the publicly held shares was the result of negotiations between the Company
and attorneys for the class action plaintiffs and has the approval of a
committee of independent directors. An investment banking firm provided an
opinion, that the consideration to be received by holders of our Common Stock,
other than Jack Nicklaus and his family, pursuant to the Settlement Agreement is
fair from a financial point of view to such holders. The Settlement Agreement
was approved by the United States District Court at a final hearing on March 28,
2000. In connection with the Company's execution of the Settlement Agreement,
the Company has also entered into an agreement with Andersen resolving the
Company's claims against it relating to services provided by Andersen. Pursuant
to the agreement, Andersen agreed to pay the Company $3.8 million in cash and
waive approximately $750,000 of receivables associated with work rendered.

The Securities and Exchange Commission has also advised the Company that it is
conducting a private investigation to determine whether the Company or certain
of its current or former officers, directors and employees have engaged in
conduct in violation of certain provisions of the Exchange Act and the rules and
regulations thereunder. The Company believes that such investigation is focused
principally on the recognition of additional costs and losses associated with
Paragon's former construction projects and the Company's public statements and
accounting systems with respect thereto. The Company is cooperating in such
investigation. However, the Company is unable to predict the outcome or the
additional expenses which may be incurred with the investigation.

The Company is also a party to various other legal proceedings which have arisen
in the ordinary course of its business. The ultimate outcome of these matters
cannot be predicted with certainty and these legal proceedings could result in
additional losses that may have a material adverse effect on the Company's
financial position or results of operations.

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

No matters were submitted to a vote of the stockholders of the Company during
the fourth quarter of the fiscal year ended December 31, 1999.

                                       8
<PAGE>

                                     PART II

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

The Company's Class A Common Stock, which was issued to the public in its
initial public offering on August 1, 1996, was traded on the NASDAQ Stock Market
under the symbol "JACK" until July 28, 1998, at which time the NASD suspended
trading of the Company's stock. Effective on August 18, 1998, the NASD de-listed
the Company's stock from trading on the Stock Market. The Company's Class A
Common Stock resumed trading on the over-the-counter bulletin board under the
symbol "JACK.OB" on August 20, 1998. The following table sets forth: (i) for the
period from January 1, 1998 through July 28, 1998, the high and low sales prices
per share of the Class A Common Stock as reported by the Stock Market and (ii)
for the period from August 20, 1998 through December 31, 1999 the high and low
bid quotations per share of the Class A Common Stock.

                                1999                          1998
                      -------------------------      -----------------------
                        HIGH           LOW             HIGH           LOW
                      ----------    -----------      ----------    ---------

   First Quarter      $ 3 - 1/2     $ 0 - 9/16       $ 10 - 1/8    $ 6 - 1/4
   Second Quarter       1 - 1/2       0 - 3/4           9 - 1/2      5
   Third Quarter        1 - 1/4       0 - 5/8           5 - 3/8      0 - 3/4
   Fourth Quarter       0 - 15/16     0 - 7/16          1 - 1/4      0 - 3/8

As of March 22, 2000, there were 2,744,962 shares of the Company's Class A
Common Stock outstanding and approximately 606 registered shareholders of
record.

The Company's Class B Common Stock is not publicly traded. All of the
outstanding shares of the Class B Common Stock are beneficially owned by members
of the Nicklaus family, which includes: (i) Jack W. Nicklaus, Barbara B.
Nicklaus and their estates, guardians, conservators, committees or
attorneys-in-fact; (ii) each lineal descendant of Jack W. Nicklaus and Barbara
B. Nicklaus and their respective guardians, conservators, committees or
attorneys-in-fact; (iii) each entity controlled by such family members; and (iv)
the trustee, in their respective capacities, as such, of each trust established
for the benefit of such family members (collectively, such family members herein
defined as "Nicklaus Family Members"). See Note 6 to the Consolidated Financial
Statements included at Item 8 of this Form 10-K.

No cash dividends have been declared on the Company's Class A Common Stock and
Class B Common Stock since the initial public offering. Moreover, the Company
currently intends to retain any earnings to finance the operations of its
business and does not anticipate paying any cash dividends in the foreseeable
future.

                                       9
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The selected financial data set forth below was derived from the respective
year's audited financial statements and should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included at Item 7 herein, together with the Consolidated Financial
Statements, including the Notes thereto, included at Item 8 herein. In 1998, the
Company sold Golf Centers and discontinued the construction operations conducted
by Paragon. Accordingly, the operations and financial activity associated with
such businesses have been reclassified as discontinued operations.

<TABLE>
<CAPTION>
                                                                        FOR THE YEARS ENDED DECEMBER 31,
                                                    --------------------------------------------------------------------------
                                                       1999           1998            1997            1996            1995
                                                    -----------    ------------    ------------    -----------     -----------
STATEMENT OF OPERATIONS DATA:                                     (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>              <C>             <C>             <C>              <C>

Total revenues                                      $   11,238       $ 11,385        $ 12,873        $ 10,792         $9,604
                                                    -----------    ------------    -----------     -----------     -----------
Operating costs and expenses:
   Operating expenses                                    6,923          7,722           7,691           6,458          6,366
   Compensation recorded on sale of shares
      to management(1)                                     ---            ---             ---           3,000            ---
   Corporate administration                              4,031          3,394           3,458           2,598          2,486
   Depreciation and amortization                           270            319             417             221            134
                                                    -----------    ------------    -----------     -----------     -----------
       Total operating costs and expenses               11,225         11,435          11,566          12,277          8,986
                                                    -----------    ------------    -----------     -----------     -----------
Operating income (loss)                                     14            (50)          1,307          (1,485)           618
Other income (expense)                                   4,654           (595)           (194)            188             (1)
                                                    -----------    ------------    -----------     -----------     -----------

Income (loss) from continuing operations
  before income taxes                                    4,668           (645)          1,113          (1,297)           617

Provision for income taxes                                  49            191              57              81            ---
                                                    -----------    ------------    -----------     -----------     -----------
Income (loss) from continuing operations                 4,619           (836)          1,056          (1,378)            617

Gain on sale of business segment                           ---            969             ---             ---             ---
Income (loss) from discontinued
   operations, net                                       3,195        (30,585)        (25,755)         (1,053)            617
                                                    -----------    ------------    -----------     -----------     -----------

       Net income (loss)                            $    7,814     $  (30,452)     $  (24,699)      $  (2,431)     $    1,234
                                                    ===========    ============    ===========     ===========     ===========

Earnings per share - basic and diluted:
   Income (loss) from continuing operations         $     0.84     $    (0.15)     $     0.19       $   (0.34)     $     0.21
   Income (loss) from discontinued
      operations, net                                     0.58          (5.38)          (4.68)          (0.26)           0.20
                                                    -----------    ------------    -----------     -----------     -----------
       Net income (loss) per share                  $     1.42     $    (5.53)     $    (4.49)      $   (0.60)     $     0.41
                                                    ===========    ============    ===========     ===========     ===========

Pro forma earnings per share - basic
   and diluted(2):
   Income (loss) from continuing operations                                                           $ (0.31)         $ 0.26
   Income (loss) from discontinued
      operations, net                                                                                   (0.26)           0.20
                                                                                                   -----------     -----------
       Net income (loss) per share                                                                    $ (0.57)          $0.46
                                                                                                   ===========     ===========

Weighted average common shares outstanding               5,505          5,505           5,505           4,040           3,000
                                                    ===========    ============    ===========     ===========     ===========
</TABLE>

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                               DECEMBER 31,
                                                    --------------------------------------------------------------------
                                                        1999           1998          1997          1996          1995
                                                    ------------     ---------     ---------     ---------     ---------
BALANCE SHEET DATA (AT YEAR-END):                                         (DOLLARS IN THOUSANDS)
<S>                                                 <C>              <C>           <C>            <C>           <C>
Working capital (deficit)                           $    (2,883)     $(17,105)     $(12,442)      $20,593       $   368
Total assets                                              6,783          5,884       28,898        39,829         2,681
Long-term debt                                            2,484          2,606          256           ---           ---
Shareholders' equity (deficit)                           (9,076)       (16,890)      13,561        38,254         1,030
</TABLE>

(1)  Represents compensation deemed to have been received by certain executives
     in connection with their purchase of shares in Golf Centers.
(2)  Pro forma earnings per share assumes pro forma income tax benefits of
     $127,000 and $135,000 included for the years ended December 31, 1996 and
     1995, respectively, to show the effects on the Company's operations as if
     the relevant entities comprising the Company had been C Corporations for
     income tax purposes for all of the years presented.
(3)  See discussion regarding liquidity and shareholders' deficit at Note 7 to
     the Consolidated Financial Statements included at Item 8 herein.

                                       11
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following is a discussion of the financial condition and results of
operations of the Company for the years ended December 31, 1999, 1998 and 1997.
This discussion and analysis should be read in conjunction with the Selected
Financial Data and the accompanying audited Consolidated Financial Statements of
the Company and the related Notes thereto which are included elsewhere in this
10-K.

OVERVIEW

The Company sold the stock of its wholly-owned Golf Centers subsidiary on July
20, 1998 and formally approved the discontinuance of the construction operations
conducted by its Paragon subsidiary on October 26, 1998. Accordingly, the
operations and financial activity associated with such businesses have been
reclassified as discontinued operations. The Company is focused on its core
businesses, which include the licensing of NICKLAUS, JACK NICKLAUS and GOLDEN
BEAR branded products throughout the world, the operation of the NICKLAUS FLICK
GAME IMPROVEMENT and managing the personal endorsement services provided by Jack
Nicklaus. In addition, the Company continues to be involved in golf course
construction through an agreement it entered into on December 18, 1998 with
Weitz Golf International LLC ("Weitz Golf"), a construction company focused on
building golf courses and clubhouses nationally and internationally. Under the
terms of the agreement, the Company, International and Jack Nicklaus will
provide certain technical and marketing assistance in connection with the
construction services offered by Weitz Golf, which include general contracting,
design-build and construction management. The principal markets targeted for
these services are developers and designers in the golf industry. Pursuant to
the terms of the agreement, Golden Bear is entitled to receive fees based on the
cumulative profitability of Weitz Golf's operations and Golden Bear will not
offer construction services directly during the term of the agreement. The
Company is entitled to receive 40% of the cumulative net profits, as defined,
earned by Weitz Golf pursuant to the contracts it enters into during the term of
the agreement. There were no cumulative net profits from the operations of Weitz
Golf through December 31, 1999.

In connection the restatement of the Company's financial statements included in
its Annual Report on Form 10-K for the year ended December 31, 1997 and its
Quarterly Report on Form 10-Q for the three months ended March 31, 1998,
numerous purported class action lawsuits have been filed against the Company and
certain current and former officers and directors of the Company, asserting
various claims under the federal securities laws. On December 22, 1999, the
parties to such lawsuits entered into a Settlement Agreement. Under the terms of
the Settlement Agreement, the Company has established a settlement fund in the
amount of $3.5 million to settle the class action litigation. The Company
contributed $2.5 million to the settlement fund, which amount was funded by the
Company's insurance carrier. Pursuant to the Settlement Agreement, Andersen also
contributed $1.0 million to the settlement fund. In addition, the Company has
taken the steps necessary to acquire all the shares held by public shareholders
at a cash price of $0.75 per share. The price for the publicly held shares was
the result of negotiations between the Company and attorneys for the class
action plaintiffs and has the approval of a committee of independent directors.
An investment banking firm provided an opinion, that the consideration to be
received by holders of the Company's Common Stock, other than Jack Nicklaus and
his family, pursuant to the Settlement Agreement is fair from a financial point
of view to such holders. The Settlement Agreement was approved by the United
States District Court during a final hearing on March 28, 2000. See Note 12 to
the Consolidated Financial Statements.

The Securities and Exchange Commission ("SEC") has also advised the Company that
it is conducting a private investigation to determine whether the Company or
certain of its current or former officers, directors and employees have engaged
in conduct in violation of certain provisions of the Securities Exchange Act of
1934 and the rules and regulations thereunder. The Company believes that such
investigation is focused principally on the recognition of additional costs and
losses associated with the review of Paragon construction projects and the
Company's public statements and accounting systems with respect thereto. The
Company is cooperating in such investigation. However, the Company is unable to
predict the outcome or the additional expenses which may be incurred with the
investigation.

                                       12
<PAGE>

DISCONTINUED OPERATIONS

GOLDEN BEAR GOLF CENTERS, INC.

In 1998, the Company sold the stock of its wholly-owned Golf Centers subsidiary.
In connection with the sale, the Company entered into a licensing agreement with
the purchaser granting such purchaser the right to continue operating the
acquired golf centers under the GOLDEN BEAR GOLF CENTER brand name. The Company
retained its licensing and franchising rights with respect to being able to
offer franchise opportunities to outside parties for the operation of golf
instruction and practice facilities. In this regard, Golf Centers distributed
certain of its assets and liabilities to the Company prior to the closing of the
sale. All of the financial activities associated with the operations that were
sold have been classified as discontinued operations.

PARAGON CONSTRUCTION INTERNATIONAL, INC.

In 1998, the Company's Board of Directors approved the discontinuance of the
construction operations conducted by Paragon. All such projects have been
completed and the Company is no longer actively involved in pursuing
construction projects independent of its agreement with Weitz Golf. Paragon had
been involved in providing comprehensive golf course and other resort-related
construction services, including project management, shaping, renovation and
golf course construction. The financial activity and operations associated with
Paragon have been classified as discontinued operations.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999 COMPARED WITH YEAR ENDED DECEMBER 31, 1998

Total revenues were $11.2 million during the year ended December 31, 1999,
compared to $11.4 million for the comparable period of 1998. The $0.2 million
decrease in total revenues during the current year was attributable to decreased
revenue from marketing and endorsement fees and tuition, offset in part by
increased licensing activities and income from the Company's JNAI joint venture.

Licensing and other revenues increased by $0.5 million during 1999, due
primarily to an increase in licensing activities, partially offset by a decline
in marketing and endorsement revenue. Income from the operations of JNAI
increased by $0.2 million during the current year.

Revenues attributable to the Company's golf instruction operations decreased by
$0.4 million during the year ended December 31, 1999. The decline in golf
instruction revenue is primarily attributable to lower enrollment in the
executive instruction programs, which target high-end corporate outing type
functions, partially offset by an increase in enrollment for resort instruction
programs, which target consumers that have significant disposable income.

Operating expenses were $6.9 million and $7.7 million for fiscal 1999 and 1998,
respectively. As a percentage of total revenues, operating expenses were 62% and
68% during the years ended December 31, 1999 and 1998, respectively. This $0.8
million decrease in operating expense was primarily attributable to lower cost
of sales for the golf instruction division and reductions in the marketing
division's personnel-related costs, business promotion and advertising.

Corporate administration expenses were $4.0 million and $3.4 million for the
years ended December 31, 1999 and 1998, respectively. Although the Company
effected a reduction in its ongoing overhead costs in connection with the
discontinuance of Golf Centers and Paragon, such reductions were offset by
increased costs incurred for legal and professional fees associated with the
shareholder claims and the SEC investigation. Legal related expenses for these
matters totaled $1,207,229 and $299,323 during the years ended December 31, 1999
and 1998, respectively.

Charges for depreciation and amortization expense were approximately $0.3
million for fiscal 1999 and 1998.

                                       13
<PAGE>

The Company had a net operating income of approximately $14,000 during the year
ended December 31, 1999, compared to an operating loss of $50,000 during the
prior year.

The Company earned interest income of $0.5 million during the year ended
December 31,1999, primarily comprised of earnings on cash reserves. For the
comparable period of the prior year, interest income was not material to the
Company's results of operations. Interest expense for fiscal 1999 decreased to
$23,780 compared to $0.4 million for fiscal 1998, due primarily to decreased
levels of indebtedness outstanding under the Company's revolving credit facility
and short-term credit facility during the current year.

Other income of $4.6 million for the year ended December 31, 1999 includes
amounts due to the Company related to a favorable settlement involving the
Company's independent certified public accountants. For the comparable period of
the prior year the Company's other expense of $0.2 million was due primarily to
the termination of a joint venture arrangement.

The Company has sufficient net operating loss carryforwards and other tax
benefits to absorb substantially all of the Company's Federal income tax
liabilities, however, certain of its operations are subject to state and foreign
income taxes. The tax provision for the years ended December 31, 1999 and 1998
comprised amounts incurred with respect to state and foreign income taxes.

The income from discontinued operations, for the year ended December 31, 1999 is
primarily the result of a favorable settlement with regard to litigation
involving the Company's insurance carrier that previously provided certain
construction related bonds for several of Paragon's projects. In addition, the
Company reached favorable settlements with regard to its claims with certain
project vendors and owners.

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

Total revenues were $11.4 million during the year ended December 31, 1998,
compared to $12.9 million for the comparable period of 1997. The $1.5 million
decrease in total revenues during 1998 was attributable to reductions in revenue
from related party commissions, licensing activities and the income from the
operations of JNAI, offset in part by increased revenues from the Company's golf
instruction operations. The Company received $1.3 million in related party
commissions during 1997 under a design services marketing agreement with
International that was terminated effective January 1, 1998. The costs and
expenses associated with providing the marketing services required under the
agreement were also terminated.

Licensing and other revenues decreased by $1.0 million during 1998, due
primarily to the Company's foreign operations in the Far East and other
geographical areas that experienced volatile markets and downturns in their
general economic conditions that unfavorably impacted the retail sales and
operations of Company's customers in those regions. Income from the operations
of JNAI decreased by $0.4 million during 1998 due to the volatility and downturn
in general economic conditions in the Far East, where the majority of JNAI's
customers are located. Revenues attributable to the Company's golf instruction
operations increased by $1.2 million during the year ended December 31, 1998,
due primarily to expansion of its executive golf program which targets the
high-end corporate outing type functions, along with a new source of revenues
from a premium priced program offered exclusively to women, which was introduced
during 1998.

The Company incurred a net operating loss of approximately $50,000 during the
year ended December 31, 1998, compared to generating operating income of $1.3
million during the prior year. The $1.4 million decrease in operating income for
1998 was primarily attributable to a reduction in revenues which was not offset
by a commensurate decrease in operating expenses. Operating expenses were $7.7
million for fiscal 1998 and 1997, and as a percentage of total revenues, such
expenses were 67.8% and 59.7% during the years ended December 31, 1998 and 1997,
respectively. Contributing to the increase in operating expenses as a percentage
of total revenues were increased levels of costs incurred during 1998 associated
with the provision for bad debts, advertising costs and commissions incurred in
connection with the expansion of the golf instruction operations and certain
other promotional activities.

                                       14
<PAGE>

Corporate administration expenses were $3.4 million and $3.5 million for the
years ended December 31, 1998 and 1997, respectively. The reduction in ongoing
overhead costs were due to the sale of Golf Centers and discontinuance of the
construction operations of Paragon. Charges for depreciation and amortization
expense were approximately $0.3 million and $0.4 million for fiscal 1998 and
1997, respectively.

Interest income during the year ended December 31, 1998 was not material to the
Company's results of operations. Interest income of $0.1 million for the
comparable period of the prior year was comprised primarily of earnings on the
unexpended proceeds from the Company's initial public offering which were
invested in short-term commercial paper instruments and repurchase agreements.
Interest expense for fiscal 1998 increased to $0.4 million compared to $0.1
million for fiscal 1997, due primarily to increased levels of indebtedness
outstanding under the Company's revolving credit facility and short-term credit
facility during 1998. Other expenses of $0.2 million for the years ended
December 31, 1998 and 1997 were comprised primarily of the losses associated
with a joint venture arrangement in which the Company had invested capital and
participated in the operating results of such venture.

Although the Company has sufficient net operating loss carryforwards and other
tax benefits to absorb substantially all of the Company's Federal income tax
liabilities, certain of its operations are subject to state and foreign income
taxes. The provision for income taxes of $0.2 million and $0.1 million for the
years ended December 31, 1998 and 1997, respectively, are comprised of amounts
incurred with respect to state and foreign income taxes.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1999, the Company had a working capital deficit of $2.9
million including cash and cash equivalents of $1.4 million.

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Primarily as a result of losses
and costs, previously incurred by the Company's Paragon subsidiary, the Company
has incurred operating losses which have resulted in a shareholders' deficit of
approximately $9.1 million and a working capital deficiency of approximately
$2.9 million at December 31, 1999. The circumstances surrounding the losses
previously incurred by Paragon have resulted in substantial claims and
litigation against the Company (see Note 12 to the Financial Statements).
Management's actions in regard to these matters included discontinuing the
Company's construction operations in 1998 and reducing ongoing expenses.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company's continuation as a going
concern and future working capital requirements are dependent on the Company's
ability to successfully complete such negotiations involving Paragon and on its
ability to achieve and maintain profitable operations in the future. Management
of the Company believes that such objectives are attainable. However, there is
no assurance that the Company will be successful in realizing these objectives,
or that the Company will generate sufficient cash flow from operations to meet
its future working capital requirements. To the extent that capital requirements
exceed available capital, the Company will be required to seek alternative
sources of financing to fund its operations. The Company has no existing credit
facility and there is no assurance that alternative financing will be available,
if at all, on satisfactory terms. If the Company is unable to obtain
satisfactory alternative financing, the Company may be required to delay or
reduce its future expenditures, sell additional assets to meet its obligations,
seek to renegotiate the terms of its obligations or curtail its operations.
There can be no assurance that any source of funds or other actions taken by the
Company will provide sufficient capital so as to enable the Company to remain a
going concern.

In connection with its Settlement Agreement of the class action lawsuit from
shareholders, the Company has agreed to take the steps necessary to acquire all
the shares held by public shareholders at a cash price of $0.75 per share. The
price for the publicly held shares was the result of negotiations between the
Company and attorneys for the class action plaintiffs and has the approval of a
committee of independent directors. An investment banking firm provided an
opinion, that the consideration to be received by holders of the company's
Common Stock, other than Jack Nicklaus and his family, pursuant to the
repurchase of the shares from the public shareholders through the use

                                       15
<PAGE>

of cash on hand and the net proceeds of the Company's legal settlements
disclosed in Note 12 to the Notes to Consolidated Financial Statements.

CURRENCY FLUCTUATIONS

Although substantially all of the Company's contracts are denominated in United
States dollars, fluctuations in the value of foreign currencies relative to the
United States dollar could impact the Company's results of operations. A
substantial portion of the revenues of the Company's overseas licensees are
generated in foreign currencies and accordingly, fluctuations in the value of
these currencies relative to the United States dollar could adversely affect the
Company's profitability. Royalty payments received by the Company or by JNAI
relating to foreign licensing arrangements are converted to U.S. dollars based
on the exchange rate at the time of payment.

The Company's JNAI joint venture has entered into futures contracts during 1999
and 1998 to hedge its anticipated receipt of a portion of the royalty payments
denominated in Japanese yen. Apart from these futures contracts on the part of
JNAI which were not material to the Company's results of operations, the Company
does not currently engage in hedging activities with respect to currency
fluctuations, but may do so in the future.

INFLATION

The Company does not believe that the relatively moderate rates of inflation
experienced in the United States over the last three years have had a
significant effect on its revenues or profitability. Although higher rates of
inflation have been experienced in a number of foreign countries in which the
Company does business, the Company does not believe that such rates have had a
material effect on the Company's revenues or profitability.

RECENT ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or a liability measured at its
fair value. SFAS 133 requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. In June 1999, the FASB issued Statement of Financial Accounting Standards
No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the effective date of FASB Statement No. 133." SFAS 137 deferred the
effective date of SFAS 133 to fiscal years beginning after June 15, 2000.
Management believes the impact of adopting this statement will not have a
material impact upon the Company's results of operations of financial position.

INPACT OF YEAR 2000

The Year 2000 Issue was the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.

In 1999, the Company formulated a plan to resolve the Year 2000 Issue that
included the following phases: awareness, assessment, remediation, testing and
implementation. The plan was initiated and executed to prevent major
interruptions in the business due to Year 2000 problems using both internal and
external resources to identify and correct problems and to test for readiness.

Also, the Company queried its important suppliers and customers regarding their
year 2000 remediation activities and developed a contingency plan for both
external and internal sources of non-compliance. As of December 31, 1999, all
phases were completed.

                                       16

<PAGE>

Since January 1, 2000, the Company has experienced no disruptions in its
business operations as a result of Year 2000 compliance problems and received no
reports of any Year 2000 compliance issues from either internal or external
sources. Nonetheless, some problems related to Year 2000 risks may not appear
until several months after January 1, 2000. Year 2000 issues could include
problems with the Company's own products and services or with third-party
products or technology that the Company uses. The Company can provide no
assurance that all supplier and customer Year 2000 compliance plans were
successfully completed in a timely manner, although it is not currently aware of
any problems, which would significantly impact its operations.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

This Annual Report on Form 10-K contains forward-looking statements made
pursuant to the safe harbor provisions of the Securities Litigation Reform Act
of 1995. These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, including
but not limited to, those risks associated with economic conditions generally
and the economy in those areas where the Company has assets and operations;
competitive and other factors affecting the Company's operations, markets,
products and services; risks associated with its licensing activities including
risks associated with the operations of its licensees; risks associated with its
discontinued operations and the risks relating to pending litigation and
associated costs; and other factors discussed elsewhere in this release and in
documents filed by the Company with the Securities and Exchange Commission. Many
of these factors are beyond the Company's control. Actual results could differ
materially from these forward-looking statements. In light of these risks and
uncertainties, there can be no assurance that the forward-looking information
contained in this Annual Report on Form 10-K will, in fact, occur. The Company
does not undertake any obligation to revise these forward-looking statements to
reflect future events or circumstances and other factors discussed elsewhere in
this report and the documents filed by the Company with the Securities and
Exchange Commission.

                                       17
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to the impact of interest rate changes. Such exposure to
market risk is inherent in certain of the Company's financial instruments which
arise from transactions entered into in the normal course of business. The
Company is subject to interest rate risk on its outstanding note payable to a
shareholder and any future financing requirements. The amount outstanding totals
$2.4 million and bears interest at the Wall Street Journal prime rate of 8.5% at
December 31, 1999 and matures July 2003. The Company's fixed rate indebtedness
consists of certain capital lease obligations requiring monthly payments of
principal and interest, with terms maturing through 2002.

                                       18
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                    INDEX TO CONSOLDATED FINANCIAL STATEMENTS

                                                                      PAGE
                                                                      ----
FINANCIAL STATEMENTS:
Report of Independent Certified Public Accountants..................  20
Consolidated Balance Sheets as of December 31, 1999 and 1998........  21
Consolidated Statements of Operations for the Years
   Ended December 31, 1999, 1998 and 1997...........................  22
Consolidated Statements of Shareholders' Equity (Deficit)
   for the Years Ended December 31, 1999, 1998 and 1997.............  23
Consolidated Statements of Cash Flows for the Years
   Ended December 31, 1999, 1998 and 1997...........................  24
Notes to Consolidated Financial Statements..........................  26

FINANCIAL STATEMENT SCHEDULE:
Schedule II - Valuation and Qualifying Accounts for the Years
   Ended December 31, 1999, 1998 and 1997...........................  54


                                       19
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Golden Bear Golf, Inc.:

We have audited the accompanying consolidated balance sheets of Golden Bear
Golf, Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, shareholders' equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements and the schedule referred to below are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Golden Bear Golf,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 7 to the
consolidated financial statements, primarily as a result of losses and costs
previously incurred at its construction subsidiary, Paragon Construction
International, Inc., the Company incurred significant losses from operations
which resulted in a working capital and shareholders' deficiency at December 31,
1999 and raises substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are described in
Note 7. The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
consolidated financial statements is presented for the purpose of complying with
the Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

West Palm Beach, Florida,
March 28, 2000.

                                       20
<PAGE>

                             GOLDEN BEAR GOLF, INC.

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                              DECEMBER 31,
                                                                                  -------------------------------------
                                                                                       1999                 1998
                                                                                  ----------------     ----------------
                                     ASSETS
<S>                                                                               <C>                    <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                      $   1,397,027         $    1,168,118
   Accounts receivable, net of allowances of $195,748 in 1999 and
        $280,688 in 1998                                                                398,241              1,626,783
   Due from International                                                                58,826                 41,812
   Prepaid expenses and other current assets                                          3,898,718                226,806
                                                                                  ----------------     ----------------
           Total current assets                                                       5,752,812              3,063,519

PROPERTY AND EQUIPMENT, net                                                             428,855                706,361

OTHER ASSETS, net                                                                       601,349                438,983

NET NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS                                           ---              1,675,550
                                                                                  ----------------     ----------------
           Total assets                                                           $   6,783,016          $   5,884,413
                                                                                  ================     ================

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable                                                               $   1,188,860          $   2,083,702
   Accrued liabilities                                                                1,096,858              1,145,550
   Deferred revenue                                                                   1,095,301              1,275,042
   Current portion of notes payable and capital leases                                  121,565                111,140
   Net current liabilities of discontinued operations                                 5,133,611             15,552,968
                                                                                  ----------------     ----------------
           Total current liabilities                                                  8,636,195             20,168,402
                                                                                  ----------------     ----------------
NET NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS                                4,738,500                    ---

NOTES PAYABLE AND CAPITAL LEASES, net of current portion                              2,484,494              2,606,441

COMMITMENTS AND CONTINGENCIES (Note 12)

SHAREHOLDERS' DEFICIT:
   Preferred stock, $.01 par value, 20,000,000 shares authorized,
     no shares issued and outstanding                                                       ---                    ---
   Common stock-
     Class A, $.01 par value, 70,000,000 shares authorized,
       2,744,962 shares issued and outstanding                                           27,450                 27,450
     Class B, $.01 par value, 10,000,000 shares authorized,
       2,760,000 shares issued and outstanding                                           27,600                 27,600
   Additional paid-in capital                                                        40,856,943             40,856,943
   Accumulated deficit                                                              (49,988,166)           (57,802,423)
                                                                                  ----------------     ----------------
           Total shareholders' deficit                                               (9,076,173)           (16,890,430)
                                                                                  ----------------     ----------------
           Total liabilities and shareholders' deficit                            $   6,783,016          $   5,884,413
                                                                                  ================     ================
</TABLE>
   The accompanying notes to the consolidated financial statements are an
integral part of these balance sheets.

                                       21

<PAGE>
                             GOLDEN BEAR GOLF, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                            FOR THE YEARS ENDED DECEMBER 31,
                                                                  -----------------------------------------------------
                                                                       1999               1998               1997
                                                                  ---------------    ---------------    ---------------
<S>                                                               <C>                 <C>                <C>
REVENUES:
   Golf instruction revenues                                      $ 5,339,284         $ 5,805,416        $   4,604,638
   Licensing and other revenues                                     4,680,195           4,297,232            5,316,387
   Income from operations of JNAI                                     951,392             710,643            1,080,892
   Related party commissions and fees                                 267,550             571,749            1,870,735
                                                                  ---------------    ---------------    ---------------
       Total revenues                                              11,238,421          11,385,040           12,872,652
                                                                  ---------------    ---------------    ---------------

OPERATING COSTS AND EXPENSES:
   Operating expenses                                               6,923,078           7,721,909            7,691,115
   Corporate administration                                         4,031,742           3,393,675            3,457,733
   Depreciation and amortization                                      270,048             319,449              416,910
                                                                  ---------------    ---------------    ---------------
       Total operating costs and expenses                          11,224,868          11,435,033           11,565,758
                                                                  ---------------    ---------------    ---------------

       Operating income (loss)                                         13,553             (49,993)           1,306,894
                                                                  ---------------    ---------------    ---------------
OTHER INCOME (EXPENSE):
   Interest income                                                    108,845              45,096              110,695
   Interest expense                                                   (23,781)           (398,556)             (91,032)
   Other                                                            4,569,233            (242,089)            (213,821)
                                                                  ---------------    ---------------    ---------------
       Total other income (expense)                                 4,654,297            (595,549)            (194,158)
                                                                  ---------------    ---------------    ---------------
       Income (loss) from continuing operations
            before income taxes                                     4,667,850            (645,542)           1,112,736

PROVISION FOR INCOME TAXES                                             48,768             190,716               56,230
                                                                  ---------------    ---------------    ---------------
       Income (loss) from continuing operations                      4,619,082            (836,258)          1,056,506

   Gain on sale of business segment                                        ---             969,405                 ---

   Income (loss) from discontinued operations, net                   3,195,175         (30,584,872)        (25,755,308)
                                                                  ---------------    ---------------    ---------------

       Net income (loss)                                          $  7,814,257        $(30,451,725)     $  (24,698,802)
                                                                  ===============    ===============    ===============

EARNINGS PER SHARE - BASIC AND DILUTED:
   Income (loss) from continuing operations                       $       0.84       $       (0.15)     $         0.19
   Income (loss) from discontinued operations, net                        0.58               (5.38)              (4.68)
                                                                  ---------------    ---------------    ---------------
       Net income (loss) per share                                $       1.42       %       (5.53)     $        (4.49)
                                                                  ===============    ===============    ===============

Weighted average common shares outstanding                           5,504,962           5,504,962           5,505,200
                                                                  ===============    ===============    ===============
</TABLE>

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

                                       22
<PAGE>

                             GOLDEN BEAR GOLF, INC.

            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                          CLASS A         CLASS B         ADDITIONAL
                                           COMMON          COMMON          PAID-IN         ACCUMULATED
                                           STOCK           STOCK           CAPITAL           DEFICIT            TOTAL
                                         -----------     -----------     -------------    --------------    --------------
<S>                                      <C>                <C>          <C>              <C>               <C>
BALANCE, December 31, 1996               $  27,448          $27,600      $40,850,358      $(2,651,896)      $  38,253,510

Repurchase and retirement of
   common stock                                (30)             ---          (43,783)             ---             (43,813)

Exercise of stock options                       32              ---           50,368              ---              50,400

Net loss                                       ---              ---              ---      (24,698,802)        (24,698,802)
                                         -----------     -----------     -------------    --------------    --------------

BALANCE, December 31, 1997                  27,450           27,600       40,856,943      (27,350,698)         13,561,295

Net loss                                       ---              ---              ---      (30,451,725)        (30,451,725)
                                         -----------     -----------     -------------    --------------    --------------

BALANCE, December 31, 1998                  27,450           27,600       40,856,943      (57,802,423)        (16,890,430)

Net income                                     ---              ---              ---        7,814,257           7,814,257
                                         -----------     -----------     -------------    --------------    --------------

BALANCE, December 31, 1999                 $27,450          $27,600      $40,856,943     $(49,988,166)      $  (9,076,173)
                                         ===========     ===========     =============    ==============    ==============
</TABLE>

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

                                       23
<PAGE>

                             GOLDEN BEAR GOLF, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                     FOR THE YEARS ENDED DECEMBER 31,
                                                                         ----------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:                                          1999                1998                 1997
                                                                         -----------------    ----------------     ----------------
<S>                                                                        <C>                <C>                  <C>
   Net income (loss)                                                       $ 7,814,257        $  (30,451,725)      $  (24,698,802)
   Adjustments to reconcile net income (loss) to net cash provided by
       operating activities:
          Loss on disposal of assets                                            29,160                   ---                  ---
          Depreciation and amortization                                        270,048               319,449              416,910
          Provision for uncollectible accounts                                 109,835               384,995               80,250
          Net (income) loss from discontinued operations                    (3,195,175)           29,615,467           25,755,308
   Changes in assets and liabilities:
           Accounts receivable                                               1,118,707              (510,011)            (132,590)
           Due from International                                              (17,014)              115,886              685,537
           Prepaid expenses and other current assets                        (3,671,912)               77,309             (177,935)
           Other assets                                                       (162,366)              107,836             (227,234)
           Accounts payable                                                   (894,842)            1,185,738              131,914
           Accrued liabilities                                                 (48,692)              435,052              264,530
           Deferred revenue                                                   (179,741)              615,226              296,576
                                                                         -----------------    ----------------     ----------------

           Net cash provided by operating activities                         1,172,265             1,895,222            2,394,464
                                                                         -----------------    ----------------     ----------------

NET CASH USED IN DISCONTINUED OPERATIONS:                                     (810,132)          (16,388,357)         (17,151,881)
                                                                         -----------------    ----------------     ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                        (21,702)              (88,053)            (116,542)
   Proceeds from sale of  property and equipment                                   ---               131,310                  ---
   Proceeds from sale of business segment                                          ---            21,505,622                  ---
                                                                         -----------------    ----------------     ----------------
           Net cash provided by (used in) investing activities                 (21,702)           21,548,879             (116,542)
                                                                         -----------------    ----------------     ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from note payable - shareholder                                        ---             2,400,000                  ---
   Proceeds from short-term credit facility                                        ---             5,000,000                  ---
   Repayment of short-term credit facility                                         ---            (5,000,000)                 ---
   Proceeds from subordinated short-term loan - shareholder                        ---               850,000                  ---
   Repayment of subordinated short-term loan - shareholder                         ---              (850,000)                 ---
   (Repayment of) proceeds from revolving credit facility, net                     ---            (8,872,410)           8,872,410
   Payments on capital lease obligations                                      (111,522)              (90,519)             (77,079)
   Proceeds from exercise of stock options                                         ---                  ---                50,400
   Repurchase and retirement of common stock                                       ---                  ---               (43,813)
                                                                         -----------------    ----------------     ----------------
           Net cash (used in) provided by financing activities                (111,522)           (6,562,929)           8,801,918
                                                                         -----------------    ----------------     ----------------
           Net increase (decrease) in cash and cash equivalents                228,909               492,815           (6,072,041)

CASH AND CASH EQUIVALENTS, beginning of year                                 1,168,118               675,303            6,747,344
                                                                         -----------------    ----------------     ----------------

CASH AND CASH EQUIVALENTS, end of year                                   $   1,397,027        $    1,168,118       $      675,303
                                                                         =================    ================     ================
</TABLE>

                                   (Continued)
   The accompanying notes to the consolidated financial statements are an
integral part of these statements.

                                       24
<PAGE>

                             GOLDEN BEAR GOLF, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)

<TABLE>
<CAPTION>
                                                                            FOR THE YEARS ENDED DECEMBER 31,
                                                                  -----------------------------------------------------
                                                                       1999               1998               1997
                                                                  ---------------    ---------------    ---------------
<S>                                                               <C>                <C>                 <C>
SUPPLEMENTAL DISCLOSURE OF NON-CASH
   OPERATING AND INVESTING ACTIVITIES:
   Acquisitions of office furniture and equipment accounted
      for as capital lease obligations                            $         ---      $          ---      $     485,179
   Discontinued operations:
      Notes payable, capital lease and other obligations issued
           in connection with the acquisition of golf centers     $         ---      $          ---      $   3,074,000
      Acquisitions of computer equipment and office furniture
           accounted for as capital lease obligations             $         ---      $      666,279      $         ---
      Notes payable and capital lease obligations issued in
           connection with acquisition of construction
             equipment                                            $         ---      $    2,161,221      $   2,706,716
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:
         Cash paid for interest                                   $     562,937      $    1,951,500      $     938,012
         Cash paid for income taxes                               $     106,656      $      140,186      $     376,485
</TABLE>
   The accompanying notes to the consolidated financial statements are an
integral part of these statements.

                                       25
<PAGE>

                             GOLDEN BEAR GOLF, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

The accompanying Consolidated Financial Statements include the accounts of
Golden Bear Golf, Inc. and its subsidiaries ("Golden Bear" or the "Company").
All significant intercompany accounts and transactions have been eliminated. In
order to maintain consistency and comparability between periods presented,
certain amounts have been reclassified from the previously reported financial
statements in order to conform to the financial statement presentation of the
current year. The Company sold its wholly-owned subsidiary, Golden Bear Golf
Centers, Inc. ("Golf Centers") on July 20, 1998 and formally approved the
discontinuance of the construction operations conducted by its wholly-owned
subsidiary, Paragon Construction International, Inc. ("Paragon") on October 26,
1998. Accordingly, the operations and financial activity associated with such
businesses have been reclassified as discontinued operations. With the
disposition of such operations, the Company is focused on its core businesses,
which include the licensing of NICKLAUS, JACK NICKLAUS and GOLDEN BEAR branded
products throughout the world, the operation of the NICKLAUS FLICK GAME
IMPROVEMENT and managing the personal endorsement services provided by Jack
Nicklaus.

Golden Bear was formed on June 7, 1996 to enter into an exchange agreement which
was consummated on August 1, 1996 upon the closing of an initial public offering
of Golden Bear's Class A Common Stock. Parties to the plan of reorganization
included, among others, Golden Bear's affiliates, Golf Centers, Paragon
(collectively, the "Constituent Companies") and Golden Bear International, Inc.
("International"), a privately owned company controlled by Jack Nicklaus.
Pursuant to the exchange agreement, Golden Bear acquired all of the outstanding
common stock of the Constituent Companies in exchange for an aggregate of
1,668,000 shares of its Class A and Class B Common Stock. In addition, Golden
Bear acquired certain assets and assumed certain liabilities of International in
exchange for 1,332,000 shares of Class B Common Stock. The transaction was
accounted for on a historical cost basis in a manner similar to a pooling of
interests as Golden Bear and the Constituent Companies had common stockholders
and management. International is primarily involved in golf course design and
consulting, along with the development of residential communities and daily fee
golf courses.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised primarily of funds on deposit in
interest bearing accounts with various banks with maturities of less than ninety
days.

ACCOUNTS RECEIVABLE AND REVENUE RECOGNITION

Golf instruction revenues are recognized concurrent with the time the services
are rendered. Licensing revenues are recognized over the terms of the underlying
licensing agreements, generally from five to ten years. Revenues attributable to
strategic marketing agreements are recognized over the respective contract
periods as the goods and services required thereunder are provided. The
Company's golf center licensing arrangements generally have initial terms of
three to five years, with options to renew. Licensing fees are derived from the
establishment of franchised golf center facilities and accordingly, such
revenues are recognized when substantially all of the services required under
the development agreements have been performed. The Company also earns royalty
fees by providing assistance with marketing, training and other operational
issues to its franchised golf centers. Such royalty fees are based upon
licensees' adjusted gross revenues, as defined, and are recognized as revenues
when earned. In this regard, the Company has a significant agreement with one
licensee covering 21 golf center facilities, for which the Company is entitled
to receive minimum annual licensing fees of $795,000. Pursuant to the agreement,
the Company received licensing fees of $795,000 from this licensee during the
year ended December 31, 1999 and

                                       26
<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

accordingly, the Company recognized licensing fees in this amount. This
licensing agreement has a term that expires on December 31, 2008, although the
licensee may elect to terminate the agreement effective December 31, 2000.
During 1999, the licensee experienced financial difficulties and there is no
assurance that the Company will continue to receive the licensing fees under the
agreement.

Related party management fees are attributable to the personal endorsement
services provided by Jack Nicklaus and are recognized as revenue when Jack
Nicklaus becomes entitled to receive such fees. The Company is generally
entitled to approximately 20% to 30% of all such endorsement revenues received
by Jack Nicklaus. See Note 13.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is provided for on the
straight-line method over the estimated useful lives of the assets generally
ranging from three to seven years. Expenditures for major additions and
improvements are capitalized, while minor replacements, maintenance and repairs
are charged to expense as incurred. When property is retired or otherwise
disposed of, the cost and accumulated depreciation are removed from the accounts
and any resulting gain or loss is recognized currently. The Company periodically
evaluates whether events and circumstances have occurred that may warrant
revision of the estimated useful life of its property and equipment or whether
the remaining balance of its property and equipment should be evaluated for
possible impairment. The Company uses an estimate of the related undiscounted
cash flows over the remaining life of the property and equipment in measuring
their recoverability.

DEFERRED REVENUE

Deferred revenue includes fees collected in excess of amounts earned under the
Company's marketing, licensing and royalty agreements as well as fees collected
in advance for the Company's golf instruction operations.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates made by management include the allowance
for doubtful accounts receivable, the estimated useful lives and realizability
of the Company's long-lived assets, amounts owed under consulting agreement (See
Note 12), and recorded amounts for claims and assessments against the Company.
Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company accounts for its financial instruments in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 107, "Disclosures About Fair
Value of Financial Instruments." Cash and cash equivalents, accounts receivable,
prepaid expenses and other current assets, accounts payable, accrued
liabilities, deferred revenue and capital leases are reflected in the
accompanying Consolidated Financial Statements at cost which approximates fair
value. The carrying value of fixed rate indebtedness at December 31, 1999 was
$206,059 which approximates the estimated fair value. The estimated fair value
of such indebtedness was determined based on the expected future payments
discounted at risk adjusted rates for debt of similar terms and remaining
maturities.

INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". Accordingly, deferred income taxes have been
provided for to show the effect of temporary differences between the tax basis
of assets and liabilities and their reported amounts in the consolidated
financial statements. The Company

                                       27
<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

files a consolidated Federal income tax return that includes the operations of
the Company and its subsidiaries. A valuation allowance was established to
offset the Company's net deferred tax assets as of December 31, 1999 and 1998
because management currently believes that the future realization of such
deferred tax assets is not more likely than not. See Notes 7 and 9.

EARNINGS (LOSS) PER SHARE

Income (loss) per share in the accompanying Consolidated Statements of
Operations is computed by dividing the net income (loss) by the weighted average
common shares outstanding for the respective years. Diluted earnings per share
as computed under SFAS No. 128 includes the effects of common stock equivalents,
including the dilutive effect of all outstanding stock options using the
treasury stock method. Diluted earnings per share is the same as basic earnings
per share in the accompanying Consolidated Statements of Operations. Options to
purchase 181,175, 222,675 and 670,150 shares of common stock were not included
in computing earnings per share for the years ended December 31, 1999, 1998 and
1997, respectively, because their effects were anti-dilutive for the respective
years.

ACCOUNTING PRONOUNCEMENTS

Comprehensive income is defined as the change in equity during the financial
reporting period of a business enterprise resulting from non-owner sources.
During the years ended December 31, 1999, 1998 and 1997, the Company did not
have any changes in its equity resulting from such non-owner sources, and
accordingly, comprehensive income as set forth by SFAS No. 130 was equal to the
net income (loss) amounts presented for the respective years in the accompanying
Consolidated Statements of Operations.

The Financial Accounting Standards Board ("FASB") issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or a liability
measured at its fair value. SFAS No. 133, which requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. The FASB issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the effective date
of FASB Statement No. 133." SFAS No. 137 deferred the effective date of SFAS No.
133 to fiscal years beginning after June 15, 2000. Management believes the
impact of adopting this statement will not have a material impact upon the
Company's results of operations of financial position.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31,
                                                                --------------------------------------
                                                                      1999                 1998
                                                                -----------------    -----------------
<S>                                                               <C>                  <C>
      Computer equipment                                          $      816,034       $      795,625
      Telephone and other office equipment                               285,295              431,118
      Furniture and fixtures                                             204,582              540,831
      Leasehold improvements                                              36,893              116,104
                                                                -----------------    -----------------
                                                                       1,342,804            1,883,678
      Less accumulated depreciation and amortization                    (913,949)          (1,177,317)
                                                                -----------------    -----------------
                                                                  $      428,855       $      706,361
                                                                =================    =================
</TABLE>

                                       28
<PAGE>

3. OTHER ASSETS

Other assets consist of the following:

                                                   DECEMBER 31,
                                      ---------------------------------------
                                            1999                  1998
                                      -----------------     -----------------
      Investment in JNAI                $      533,805       $      357,139
      Other                                     67,544               81,844
                                      -----------------     -----------------
                                        $      601,349       $      438,983
                                      =================     =================

4. ACCRUED LIABILITIES

Accrued liabilities consist of the following:

                                                   DECEMBER 31,
                                       --------------------------------------
                                             1999                 1998
                                       -----------------     ----------------

      Payroll and related costs          $      393,407        $    601,879
      Professional fees                         405,868             260,707
      State income taxes                         10,000             165,693
      Other                                     287,583             117,271
                                       -----------------     ----------------
                                         $    1,096,858        $  1,145,550
                                       =================     ================

5. NOTES PAYABLE AND CAPITAL LEASES

Notes payable and capital leases consist of the following:

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                          --------------------------------------
                                                                                1999                 1998
                                                                          -----------------     ----------------
<S>                                                                       <C>                    <C>
      Capital lease obligations secured by furniture and equipment, with
         principal and interest at 9% payable monthly, maturing
         through June, 2002(1)                                             $     206,059         $      317,581

      Note payable to shareholder, with interest at The Wall Street Journal
         Prime Rate (8.50% at December 31, 1999) payable
         monthly, entire principal due in July, 2003(2)                        2,400,000              2,400,000
                                                                          -----------------     ----------------
                                                                               2,606,059              2,717,581
      Less current portion                                                      (121,565)              (111,140)
                                                                          -----------------     ----------------
                                                                           $   2,484,494          $   2,606,441
                                                                          =================     ================
</TABLE>
(1)  The Company acquired certain office furniture and phone systems equipment
     by entering into financing arrangements that were accounted for as capital
     leases. These capital lease obligations have initial terms of five years
     and require monthly payments representing principal and interest.

(2)  In July 1998, the Company issued an unsecured promissory note for $2.4
     million payable to Jack Nicklaus, the principal stockholder of the Company
     and Chairman of the Company's Board of Directors. The proceeds of the note
     were used in connection with the settlement of certain claims associated
     with a golf course development project.

                                       29
<PAGE>

5. NOTES PAYABLE AND CAPITAL LEASES - (CONTINUED)

The following table sets forth the future minimum lease payments under capital
lease obligations, together with the present value of the net minimum lease
payments as of December 31, 1999.

                                                    CAPITAL LEASE
      Years ending December 31:                      OBLIGATIONS
                                                   -----------------
      2000                                           $     135,212
      2001                                                  81,829
      2002                                                   7,252
                                                   -----------------
      Total minimum payments                               224,293
      Less amount representing interest(1)                 (18,234)
                                                   -----------------
      Present value of minimum payments              $     206,059
                                                   =================

(1)  Represents amount necessary to reduce the net minimum payments to present
     value calculated at the Company's estimated incremental borrowing rate at
     the inception of the respective obligations.

6. COMMON STOCK

The shares of Class A Common Stock and Class B Common Stock are identical in all
respects, except for voting rights and certain conversion rights and transfer
restrictions in respect of the shares of the Class B Common Stock. Each share of
Class A Common Stock entitles the holder to one vote on each matter submitted to
a vote of Golden Bear's shareholders and each share of Class B Common Stock
entitles the holder to ten votes on each such matter, including the election of
directors. Neither the Class A Common Stock nor the Class B Common Stock have
cumulative voting rights.

Holders of Class A Common Stock and Class B Common Stock are entitled to receive
dividends at the same rate if and when declared by the Board of Directors out of
funds legally available therefore, subject to the dividend and liquidation
rights of any Preferred Stock that may be issued and outstanding. There are
certain restrictions with respect to the transfer of Class B Common Stock. All
of the shares of Class B Common Stock are held by Nicklaus family members or by
entities controlled by or established for the benefit of such members ("Nicklaus
Family Members"). If a holder of Class B Common Stock transfers such shares,
whether by sale, assignment, gift, bequest, appointment or otherwise, to a
person other than a Nicklaus Family Member, such shares will be converted
automatically into shares of Class A Common Stock.

Class A Common Stock has no conversion rights. Class B Common Stock is
convertible into unregistered shares of Class A Common Stock, in whole or in
part, at any time and from time to time at the option of the holder, on the
basis of one share of Class A Common Stock for each share of Class B Common
Stock converted.

In the event of liquidation, after payment of the debts and other liabilities of
Golden Bear and after making provision for the holders of Preferred Stock, if
any, the remaining assets of the Company will be distributable ratably among the
holders of the Class A Common Stock and Class B Common Stock treated as a single
class. Upon the merger or consolidation of Golden Bear, holders of Class A
Common Stock and Class B Common Stock each are entitled to receive equal per
share payments or distributions, except that in any transaction in which shares
of capital stock are distributed, such shares may differ as to voting rights to
the extent and only to the extent that the voting rights of the Class A Common
Stock and Class B Common Stock differ at that time.

The company has agreed to take the steps necessary to acquire all the shares
held by public shareholders subsequent to December 31, 1999 (See Note 12).

                                       30
<PAGE>

7. SHAREHOLDERS' DEFICIT AND LIQUIDITY

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Primarily as a result of losses
and costs, previously incurred by the Company's Paragon subsidiary, the Company
has incurred operating losses which have resulted in a shareholders' deficit of
approximately $9.1 million and a working capital deficiency of approximately
$2.9 million at December 31, 1999. The circumstances surrounding the losses
previously incurred by Paragon have resulted in substantial claims and
litigation against the Company (See Note 12). Management's actions in regard to
these matters included discontinuing the Company's construction operations in
1998 and reducing ongoing expenses.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company's continuation as a going
concern and future working capital requirements are dependent on the Company's
ability to successfully complete such negotiations involving Paragon and on its
ability to achieve and maintain profitable operations in the future. Management
of the Company believes that such objectives are attainable. However, there is
no assurance that the Company will be successful in realizing these objectives,
or that the Company will generate sufficient cash flow from operations to meet
its future working capital requirements. To the extent that capital requirements
exceed available capital, the Company will be required to seek alternative
sources of financing to fund its operations. The Company has no existing credit
facility and there is no assurance that alternative financing will be available,
if at all, on satisfactory terms. If the Company is unable to obtain
satisfactory alternative financing, the Company may be required to delay or
reduce its future expenditures, sell additional assets to meet its obligations,
seek to renegotiate the terms of its obligations or curtail its operations.
There can be no assurance that any source of funds or other actions taken by the
Company will provide sufficient capital so as to enable the Company to remain a
going concern.

8. OPERATIONS OF JNAI

The apparel licensing activities of the Company in the Far East are conducted
through Jack Nicklaus Apparel International ("JNAI") and its various
partnerships. The Company serves as a 50% general partner and is generally
entitled to receive 50% of the cash distributions of the various partnerships'
operations. The Company's investment in JNAI is recorded on the equity method.

The joint venture agreement provides that JNAI shall continue until December 31,
2000, unless otherwise terminated prior to that date by the mutual consent of
both partners or by operation of law. However, the termination date set forth in
the joint venture agreement can be extended by mutual consent of both partners.
Upon termination of JNAI, its net remaining assets are to be distributed to its
two partners in the manner set forth in the joint venture agreement, which
generally provides for distributions of equal amounts. As of March 29, 2000, the
joint venture agreement has not been extended beyond December 31, 2000.

The following is a condensed summary of the operating results of JNAI:

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED NOVEMBER 30,
                                                         -----------------------------------------------------
                                                              1999               1998               1997
                                                         ---------------    ---------------     --------------
<S>                                                         <C>                <C>                <C>
      Licensing revenues                                    $ 2,644,833        $ 2,052,410        $ 2,927,236
      Operating expenses and other                              404,448            439,576            755,052
      Provision for income taxes                                337,601            191,548             10,400
                                                         ---------------    ---------------     --------------
      Net income                                            $ 1,902,784        $ 1,421,286        $ 2,161,784
                                                         ===============    ===============     ==============
</TABLE>

                                       31
<PAGE>

9. INCOME TAXES

The components of the provision for income taxes for the respective fiscal years
consists of the following:

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED DECEMBER 31,
                                                         -----------------------------------------------------
                                                              1999               1998               1997
                                                         ---------------    ---------------     --------------
      <S>                                                  <C>                <C>                 <C>
      Current:
         State                                             $     10,000       $    175,629        $    32,091
         Foreign                                                 38,768             15,087             24,139
      Deferred:
         Federal                                             (2,894,959)        (8,191,023)        (8,244,808)
         State                                                      ---            116,520           (635,288)
      Change in valuation allowance                           2,894,959          8,074,503          8,880,096
                                                         ---------------    ---------------     --------------

      Provision for income taxes                           $     48,768       $    190,716        $    56,230
                                                         ===============    ===============     ==============
</TABLE>

A reconciliation of the difference between the expected provision for income
taxes on continuing operations using the statutory Federal tax rate and the
Company's actual provision is presented below:

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED DECEMBER 31,
                                                         -----------------------------------------------------
                                                              1999               1998               1997
                                                         ---------------    ---------------     --------------
      <S>                                                  <C>                <C>                 <C>
      Provision using statutory Federal rate               $  1,597,069       $   (219,484)       $   378,330
      Non-deductible expenses                                    92,658             31,710             54,404
      State income taxes                                         10,000            175,629             32,091
      Foreign income taxes                                       38,768             15,087             24,139
      Change in valuation allowance                          (1,679,727)           187,774           (432,734)
                                                         ---------------    ---------------     --------------
                                                           $     48,768       $    190,716        $    56,230
                                                         ===============    ===============     ==============
</TABLE>

The net deferred income tax asset is comprised of the following:

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                         ----------------------------------
                                                              1999               1998
                                                         ---------------    ---------------
<S>                                                      <C>                  <C>
      Deferred income tax assets:
         Allowance for doubtful accounts                 $      66,554        $  2,878,753
         Tax basis capitalized costs                               ---             132,413
         Tax basis in property and equipment
            in excess of book basis                             82,533              82,533
         Accruals not currently deductible                     229,304              71,114
         Net operating loss carryforwards                   19,234,307          13,914,507
         Foreign tax credit carryforwards                      851,149             497,094
                                                         ---------------    ---------------
                                                            20,463,847          17,576,414
                                                         ---------------    ---------------
      Deferred income tax liabilities:
         Book basis in intangible assets over tax basis            ---               7,526
         Book basis of investment in JNAI
            over tax basis                                     100,000             100,000
         Deferred revenue                                      (24,735)            (24,735)
                                                         ---------------    ---------------
                                                                75,265              82,791
                                                         ---------------    ---------------
      Net deferred income tax asset                         20,388,582          17,493,623
      Valuation allowance                                  (20,388,582)        (17,493,623)
                                                         ---------------    ---------------
                                                           $       ---        $        ---
                                                         ===============    ===============
</TABLE>

                                       32
<PAGE>

9. INCOME TAXES - (CONTINUED)

At December 31, 1999, the Company had available a Federal net operating loss
carryforward of approximately $33.1 million which expires in the year 2018,
along with a foreign tax credit carryforward of $851,149 which expires in 2008.

In assessing the realizability of deferred tax assets, management must consider
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. At December 31, 1999 and 1998, the Company provided
a full valuation allowance to reserve for the net deferred tax asset balances
because management currently believes that the future realization of such
deferred tax assets is not more likely than not.

10.  STOCK OPTIONS

A total of 675,000 shares of the Company's Class A Common Stock may be issued
under the Golden Bear 1996 Stock Option Plan ("Option Plan"), which was adopted
in July 1996. Options under the Option Plan are granted at an exercise price
equal to the fair market value of the Class A Common Stock at the date of grant
and generally have a term of ten years from the date of grant. Such options
generally become fully vested five years from the grant date although certain
options granted to employees on December 31, 1997 at an exercise price of $8.00
per share were exercisable one year after the date of grant and the options
granted to Jack Nicklaus pursuant to his employment agreement with the Company
vest immediately upon being granted.

A summary of stock option transactions for the fiscal years ended December 31,
1999, 1998 and 1997 is set forth in the table below:

<TABLE>
<CAPTION>
                                                             FOR THE YEARS ENDED DECEMBER 31,
                                    -----------------------------------------------------------------------------------
                                             1999                          1998                         1997
                                    ------------------------     -------------------------    -------------------------
                                                  WEIGHTED                     WEIGHTED                     WEIGHTED
                                                   AVERAGE                      AVERAGE                      AVERAGE
                                                   EXERCISE                    EXERCISE                      EXERCISE
                                      SHARES         PRICE         SHARES         PRICE         SHARES         PRICE
                                    -----------    ----------    -----------    ----------    ------------   ----------
<S>                                  <C>              <C>           <C>            <C>            <C>           <C>
Outstanding, beginning of year       222,675          $ 11.64       670,150        $ 12.61        383,688       $ 16.00
Options granted                          ---              ---        20,000           4.00        383,150          9.92
Options exercised                        ---              ---           ---            ---         (3,150)        16.00
Options canceled/forfeited           (41,500)           14.62      (467,475)         12.71        (93,538)        15.36
                                    -----------                  -----------                  ------------
Outstanding, end of year             181,175            10.96       222,675          11.64        670,150         12.61
                                    ===========                  ===========                  ============
Exercisable at year-end              107,968          $ 10.72        91,935        $ 10.71        122,600       $ 13.28
                                    ===========                  ===========                  ============
Available for future grants          469,863                        428,363                           ---
                                    ===========                  ===========                  ============
</TABLE>

The following table summarizes information about outstanding and exercisable
stock options at December 31, 1999:

<TABLE>
<CAPTION>
                                                   OUTSTANDING                                EXERCISABLE
                                  -----------------------------------------------      ---------------------------
                                                    WEIGHTED
                                                     AVERAGE         WEIGHTED                          WEIGHTED
                                                    REMAINING          AVERAGE                          AVERAGE
EXERCISE PRICE OR RANGE                            CONTRACTUAL        EXERCISE                          EXERCISE
   OF EXERCISE PRICES               SHARES         LIFE (YEARS)         PRICE            SHARES          PRICE
------------------------------    -----------     ---------------    ------------      -----------     -----------
<S>                                   <C>                    <C>           <C>                <C>           <C>
$  4.00                               20,000                 8.58          $ 4.00            5.00           $ 4.00
   8.00                               23,875                 8.00            8.00          18,348             8.00
  10.88 - 12.75                      107,300                 6.99           11.46          89,120            11.32
  16.00                               30,000                 6.59           16.00             ---              ---
                                  -----------                                          -----------
                                     181,175                 7.24           10.93         107,968            10.72
                                  ===========                                          ===========
</TABLE>


                                       33
<PAGE>

10. STOCK OPTIONS - (CONTINUED)

In connection with his employment agreement with the Company, Jack Nicklaus is
entitled to receive options to purchase 65,000 shares of Class A Common Stock
each year for a period of four years, commencing on August 1, 1997. Such
options, which are issued with an exercise price equal to the fair market value
of the Class A Common Stock on the date of grant, are immediately exercisable
upon grant and expire in 2006. The options that Mr. Nicklaus was entitled to
receive on August 1, 1999 and 1998 were waived and deferred pending the
resolution of certain shareholder claims. See Note 12.

The Option Plan also provides for options to be granted to each non-employee
director of Golden Bear on the first business day following the annual meeting
of shareholders of the Company. Each non-employee director is granted options
for the purchase of 1,000 shares of Class A Common Stock with an exercise price
equal to the fair market value of the Class A Common Stock on the date of grant,
which expire 10 years from the date of grant. No options were granted to
non-employee directors during 1999 or 1998.

The Option Plan is administered by the Compensation Committee of the Company's
Board of Directors which is authorized to determine the provisions of future
grants, including selecting the recipients, exercise price, terms and vesting
schedules for such options.

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" in accounting for stock-based compensation
arrangements whereby no compensation costs attributable to stock options is
deducted in determining net income (loss). Had compensation costs for the
Company's Option Plan been determined pursuant to SFAS No. 123, "Accounting for
Stock-Based Compensation", the Company's net loss and net loss per share would
have changed accordingly. Using the Black-Scholes option pricing model for all
options granted, the Company's pro forma net income (loss), pro forma net income
(loss) per share and pro forma weighted average fair value of options granted,
with related assumptions, are as follows for the years ended December 31, 1999
and 1998.

<TABLE>
<CAPTION>
                                                                FOR THE YEARS ENDED DECEMBER 31,
                                                             ---------------------------------------
                                                                   1999                  1998
                                                             ------------------    -----------------
<S>                                                          <C>                   <C>
Pro forma net income (loss)                                  $       7,591,250     $ (31,096,020)
Pro forma net income (loss) per share                        $            1.38     $       (5.65)
Pro forma weighted average fair
   value of options granted                                                ---              2.95
Risk-free interest rate                                                    ---               7.0%
Expected lives                                                             ---          10 years
Expected volatility                                                        ---              55.0%
Expected quarterly dividend rate                                           ---               0.0%
</TABLE>

11. RETIREMENT SAVINGS PLAN

The Company participates in a retirement savings plan ("Savings Plan") sponsored
by International. The Savings Plan operates as a defined contribution plan and
is qualified under Section 401(k) of the Internal Revenue Code. The Savings Plan
covers all employees who have completed one year of service. The Company matches
the employees' contributions, up to a maximum of $1,500 per employee per Savings
Plan year. A participant's individual contribution is limited to the maximum
amount for such year under the Internal Revenue Code. Discretionary
contributions can also be made to the Savings Plan. All employees who have
completed one year of service and are employed at year-end are eligible for this
contribution. Company contributions to the Savings Plan were $31,911, $29,068
and $59,535 during the years ended December 31, 1999, 1998 and 1997,
respectively.

                                       34
<PAGE>

12. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company leases its corporate executive and administrative office facilities
along with certain office equipment. The rent expense incurred under these
leases was approximately $0.7 million, $0.7 million and $0.8 million during the
years ended December 31, 1999, 1998 and 1997, respectively.

Future minimum lease payments required under noncancelable operating lease
obligations are as follows:

                                                                    MINIMUM
                                                                     LEASE
      Years ending December 31:                                     PAYMENTS
                                                                ----------------
      2000                                                        $     706,567
      2001                                                              706,567
      2002                                                              685,594
      2003                                                              668,088
      2004                                                              668,088
      Thereafter                                                      1,057,806
                                                                ----------------
                                                                  $   4,492,710

                                                                ================

CLAIMS AND ASSESSMENTS

In August 1995, Paragon brought an arbitration claim against a customer for
breach of contract. Paragon alleges it has properly completed the construction
relating to the renovation of the customer's golf course and is seeking final
payment of retainage and related amounts due, together with additional damages,
totaling approximately $350,000. Simultaneous to this claim of arbitration, the
customer filed a counterclaim of arbitration against Paragon for alleged
construction defects in the renovation of its golf course. Although the customer
now claims its damages are in excess of $3.0 million, the initial claim
submitted by the customer in arbitration was for $750,000. The Company intends
to vigorously defend this claim, but the ultimate outcome of this matter is not
determinable at this time. Accordingly, no provision for loss regarding this
matter had been established at December 31, 1999. The ultimate disposition of
this matter is not expected to have a material effect on the Company's financial
position or results of operations.

In connection with the discontinuance of the construction business conducted by
Paragon and the winding down of such operations, the Company has been named in
numerous legal actions involving claims for damages and other amounts due to
certain project owners, construction vendors and subcontractors. While the
Company has entered into settlement negotiations with several claimants, the
ultimate outcome of such negotiations is not determinable at this time. Certain
of these claims, if determined adversely to the Company in the aggregate, could
have a material adverse effect on the Company's financial position and results
of operations. In 1998, the Company conducted a comprehensive review of
Paragon's construction projects, focusing on the status of the projects, the
costs required to fully complete the jobs and the anticipated profitability or
losses of such projects. Attention was also directed toward determining contract
requirements and the related estimated costs of fulfilling those requirements.

As a result of the review, the Company found evidence that former management of
Paragon deliberately falsified records, misrepresented the status of
construction projects and made false statements about Paragon's revenues, costs
and profits to the Company's executive management and Board of Directors.

                                       35
<PAGE>

12. COMMITMENTS AND CONTINGENCIES - (CONTINUED)

Based on the results of the review, it was necessary for the Company to
recognize additional costs and losses incurred on certain construction projects,
resulting in the restatement of the Company's financial statements included in
its Annual Report on Form 10-K for the year ended December 31, 1997 and its
Quarterly Report on Form 10-Q for the three months ended March 31, 1998, as
previously filed with the Securities and Exchange Commission.

As a result of the foregoing review and restatement of the Company's financial
statements, numerous purported class action lawsuits have been filed against the
Company and certain current and former officers and directors of the Company,
asserting various claims under the federal securities laws. On July 28, 1998,
individuals purporting to be shareholders of the Company filed a class action
lawsuit in the United States District Court for the Southern District of Florida
against the Company and certain of the Company's present and former officers and
directors.

Since the filing of this matter, nine additional lawsuits have been filed
against the Company and certain of its present and former officers and
directors. Eight of these lawsuits were filed in the United States District
Court for the Southern District of Florida and one was filed in the United
States District Court for the Eastern District of New York, though the court in
New York has entered an order transferring this action to the Southern District
of Florida. The District Court in Florida entered an order consolidating all of
the actions originally filed in the Southern District of Florida and all similar
actions which are transferred to or subsequently filed in the Southern District
of Florida and directed the plaintiffs to file a consolidated complaint.

On December 24, 1998, plaintiffs filed their First Consolidated Class Action
Complaint ("Consolidated Complaint") on behalf of themselves and all others who
purchased common stock of the Company from April 30, 1997 through July 27, 1998,
with the exception of the defendants and certain related or affiliated persons
or entities. The defendants named in the Consolidated Complaint are Golden Bear
Golf, Inc., Jack W. Nicklaus, Richard P. Bellinger, Jack P. Bates, Stephen S.
Winslett, John Boyd and Andersen. The Consolidated Complaint alleges that during
the purported class period, the defendants violated Section 10(b) and Rule 10b-5
promulgated thereunder and Section 20(a) of the Securities Exchange Act of 1934
by making misrepresentations or omissions of material fact in publicly filed
documents and in other alleged public statements relating to the Company's
financial condition and that of its wholly-owned subsidiary, Paragon
Construction International, Inc. The plaintiffs are seeking an unspecified
amount of damages, interest, costs and attorneys' fees.

On December 22, 1999, the parties entered into a Settlement Agreement relating
to the consolidated actions. The Settlement Agreement was approved by the United
States District Court during the final hearing on March 28,2000. In connection
with the settlement, the plaintiffs filed a motion to allow the filing of their
Second Amended Consolidated Complaint on behalf of a class of all persons,
excluding the defendants, who purchased shares of the Company's Class A Common
Stock from the date of the Company's public offering, August 1, 1996 through and
including July 27, 1998. The Amended Consolidated Complaint includes allegations
of securities law violations under Sections 11, 12(2) and 15 of the Securities
Act of 1933, Sections 10(b) and 20(a) of the Securities Act and Rule 10b-5, as
well as common law claims. Under the terms of the Settlement Agreement, the
Company has established a settlement fund in the amount of $3.5 million to
settle the class action litigation. The Company contributed $2.5 million to the
settlement fund, this amount was funded by the Company's insurance carrier.
Pursuant to the Settlement Agreement, Andersen also contributed $1.0 million to
the settlement fund.

In connection with the Company's entry into the Settlement Agreement, the
Company also entered into a settlement with Andersen to settle the Company's
claims against it. The Company had previously advised Andersen of the belief
that Andersen violated its duty of care in connection with the professional
services it provided the Company and that the Company's losses, in part,
resulted from the failure of due care. Andersen has vigorously denied a failure
of due care on its part and has vigorously denied that any of the Company's
losses resulted from anything Andersen did or failed to do. Notwithstanding
their position, in order to avoid protracted litigation in which their position
would be fully developed and resolved, the Company entered into a settlement
agreement with Andersen. Pursuant to the settlement, Andersen agreed to pay the
Company $3.8 million in cash and waive approximately $750,000 in receivables due
to Andersen from the Company. The Company has included $4.6 million in Other
Income for the year ended December 31, 1999.

                                       36
<PAGE>

12. COMMITMENTS AND CONTINGENCIES - (CONTINUED)

In addition, the Company has agreed to take the steps necessary to acquire all
the shares held by public shareholders at a cash price of $0.75 per share. The
price for the publicly held shares was the result of negotiations between the
Company and attorneys for the class action plaintiffs and has the approval of a
committee of independent directors. An investment banking firm provided an
opinion, that the consideration to be received by holders of the Company's
Common Stock, other than Jack Nicklaus and his family, pursuant to the
Settlement Agreement is fair from a financial point of view to such holders.

The Company has not given effect to the proposed repurchase of the outstanding
shares held by the public shareholders in the accompanying financial statements.
The following unaudited financial information gives pro forma effect to the
proposed repurchase had it occurred as of December 31, 1999:

                                                 AS OF DECEMBER 31,
                                                         1999
                                                 ------------------
Unaudited pro forma total assets                  $      4,594,134
Unaudited pro forma total liabilities                  (15,674,277)
                                                  ------------------
Unaudited pro forma shareholder's deficit         $    (11,080,143)
                                                  ==================

The Securities and Exchange Commission is conducting a private investigation to
determine whether the Company or certain of its current or former officers,
directors and employees have engaged in conduct in violation of certain
provisions of the Exchange Act and the rules and regulations thereunder. The
Company believes that such investigation is focused principally on the
recognition of additional costs and losses associated with the review of Paragon
construction projects and the Company's public statements and accounting systems
with respect thereto. The Company is cooperating in such investigation.

The Company is also a party to various other legal proceedings that have arisen
in the ordinary course of its business. The ultimate outcome of these matters
cannot be predicted with certainty and these legal proceedings could result in
additional losses that may have a material adverse effect on the Company's
financial position or results of operations.

CONSTRUCTION CONTRACT WARRANTIES

Paragon's construction contracts generally provided for warranties that
obligated Paragon to remedy certain construction defects that may arise in the
ordinary course of providing such construction services. Such warranties, which
are customary in the construction industry, are usually effective for a period
of one year from the completion date of the respective projects. The Company's
management does not expect the costs associated with corrective action or
penalties incurred pursuant to these warranties, if any, to have a material
impact on its results of operations.

COMMITMENT UNDER CONSULTING AGREEMENT

In connection with the sale of Golf Centers, the Company retained certain
continuing obligations under a consulting agreement associated with one of the
golf centers that were included in the sale. Under the terms of the agreement,
the Company is obligated to pay consulting fees in the amount of $50,000 per
year, payable monthly in arrears over the remaining term of the agreement,
subject to certain termination options on the part of the Company if the golf
center does not achieve and maintain certain performance criteria. In addition,
the Company is obligated to pay bonus compensation of up to an additional
$25,000 per year, to the extent that the golf center achieves certain target
operating profit margins, as set forth in the agreement.

                                       37
<PAGE>

12. COMMITMENTS AND CONTINGENCIES - (CONTINUED)

At December 31, 1999, the remaining term of the consulting agreement was
approximately 17 years. However, the Company is entitled to terminate the
agreement and its obligations thereunder, in the event that the golf center
achieves less than 90% of its targeted annual profitability, as defined in the
agreement. The targeted profitability levels are based on the average
performance over each two-year period, starting one year after the April 1997
date that the golf center opened for business. The Company has recorded a
liability for the estimated amount of its obligation under this agreement.

13.  RELATED PARTY TRANSACTIONS

The balances included in the accompanying Consolidated Balance Sheets under the
caption "Due from International" consists of the net amounts owed to Golden Bear
Golf, Inc. and its subsidiaries. At December 31, 1999 and 1998, the Company had
net amounts due from International of $58,826 and $41,812, respectively. The net
amounts due at December 31, 1999 and 1998 were comprised primarily of related
party management fees attributable to personal endorsement services performed by
Jack Nicklaus.

In 1997, the Company had a design services agreement with International pursuant
to which the Company had marketed golf course designs for Nicklaus Design, a
division of International. Under the design services marketing agreement, the
Company generally had been entitled to 10% of the gross design fees collected by
Nicklaus Design for its role in marketing such design services. The Company
earned related party commissions in this capacity of approximately $1.3 million
during fiscal 1997. Effective January 1, 1998, the design services marketing
agreement was terminated in connection with an organizational realignment,
pursuant to which International assumed certain financial obligations of the
Company to employees and third parties formerly involved in the design marketing
function.

In 1998, the Company, International and Jack Nicklaus (collectively, the
"Company Affiliates") entered into an agreement with Weitz Golf International
LLC ("Weitz Golf"), pursuant to which the Company Affiliates agreed to provide
certain technical and marketing assistance in connection with the construction
services offered by Weitz Golf, which include general contracting, design-build
and construction management. Under the agreement, the Company agreed to no
longer offer construction services independently during the term of the
agreement which expires on December 31, 2007. The Company is entitled to receive
40% of the cumulative net profits, as defined, received by Weitz Golf pursuant
to the contracts it enters into during the term of the agreement. There were no
cumulative net profits from the operations of Weitz Golf through December 31,
1999.

Pursuant to the terms of a personal services management agreement, International
and Jack Nicklaus have retained the Company as the exclusive manager and
representative to market the personal endorsement services of Jack Nicklaus,
under which the Company is generally entitled to approximately 20% to 30% of the
personal endorsement fees received by Mr. Nicklaus. During fiscal 1999, 1998 and
1997, the Company earned related party management fees attributable to providing
such services of $217,550, $571,749 and $565,905, respectively.

Under the terms of an office sharing agreement, the Company had subleased its
corporate office facilities from International for the period from August 1,
1996 through July 31, 1997. The rent expense incurred under such sublease for
the seven months ended July 31, 1997 was $358,755. Effective August 1, 1997, the
Company entered into a separate lease agreement for its corporate office
facilities directly with the owner of such facilities.

In addition, the Company had maintained certain office space in Singapore
through October 31, 1997 that was shared with International. During the ten
months ended October 31, 1997, a total of $239,000 of costs associated with
maintaining such facilities was allocated to International. The Company
subsequently terminated this lease effective April 1, 1998 and closed the office
that it had previously maintained in Singapore.

The Company has an office staff sharing agreement with International that
provides for sharing services of certain specifically identified office staff
and personnel that can effectively serve the needs of both organizations. This
agreement was established effective with the reorganization of the Company on
August 1, 1996. During the years

                                       38
<PAGE>

13. RELATED PARTY TRANSACTIONS - (CONTINUED)

ended December 31, 1999, 1998 and 1997, payroll and related costs associated
with such shared employees were allocated to International in the amounts of
$32,850, $111,000 and $458,964, respectively.

During fiscal 1997, the Company paid a $100,000 investment banking fee to
International for services rendered by Golden Bear Financial Services, a
division of International, in connection with negotiating the $10 million
revolving credit facility that the Company obtained during the year. The fee was
equal to 1% of the total facility commitment.

An analysis of the activity in "Due from International" is as follows:

<TABLE>
<CAPTION>
                                                                    FOR THE YEARS ENDED DECEMBER 31,
                                                       -----------------------------------------------------------
                                                             1999                 1998                 1997
                                                       -----------------    -----------------    -----------------
<S>                                                      <C>                  <C>                  <C>
      Balance at beginning of year                       $       41,812       $     157,698        $     843,235
      Related party commissions and fees                        217,550             571,749            1,870,735
      Reimbursement for shared employees                         32,850             111,000              458,964
      Reimbursement for Singapore office costs                     ---                  ---              239,000
      Sublease of corporate office facilities                      ---                  ---             (358,755)
      Investment banking fee                                       ---                  ---             (100,000)
      Payments received                                        (233,386)           (798,635)          (2,795,481)
                                                       -----------------    -----------------    -----------------
      Balance at end of year                             $       58,826       $      41,812        $     157,698
                                                       =================    =================    =================
</TABLE>

In the ordinary course of business, the Company purchases golf equipment
manufactured by Nicklaus Golf Equipment Company, L.C., a privately owned company
in which Jack Nicklaus has a 50% equity interest. Such equipment is currently
purchased primarily for promotional programs associated with the Company's
NICKLAUS FLICK GAME IMPROVEMENT. Prior to the sale of the Company's Golf Centers
subsidiary, such equipment was also purchased for resale in the pro shops of the
Company's golf centers. During fiscal 1999, 1998 and 1997, the Company purchased
such golf equipment at a cost of $21,312, $163,691 and $405,205, respectively.

During the years ended December 31, 1999, 1998 and 1997, the Company procured
certain printing and graphic services totaling $90,647, $93,243 and $125,101,
respectively, from Executive Sports International ("ESI"), a privately held
company owned in part by a member of the Nicklaus family. In 1999, the Company
entered into a marketing and support agreement with ESI in connection with the
promotion, marketing, sale and operation of NICKLAUS FLICK GAME IMPROVEMENT'S
Executive Golf Programs and other group golf school and clinic programs. Under
the marketing and support agreement, ESI earned a management fee of $87,000,
commissions of $90,925 and was reimbursed for student travel and amenities of
$49,000 during 1999.

In 1998, Jack Nicklaus advanced $2.4 million to the Company evidenced by an
unsecured five-year promissory note. The loan proceeds were used by the Company
in connection with the settlement of certain claims associated with a golf
course development project. Jack Nicklaus also advanced the Company $850,000
pursuant to the terms of a subordinated short-term loan which was used as bridge
financing for the Company pending the closing of the sale of Golf Centers. The
Company repaid all such advances under the subordinated short-term loan in
August 1998, using proceeds from the sale of Golf Centers.

On April 15, 1999, the Company entered into a settlement agreement with a former
customer of Paragon. Paragon had been engaged by this customer (the "Developer")
to construct a golf course located in San Jose, California ("California
Project") and one located in Orlando, Florida ("Florida Project"). Nicklaus
Design, a division of International, designed both of the golf course projects.
In addition, the Florida Project is owned by a partnership controlled by the
Developer in which International has a 25% limited partner interest. After
Paragon was unable to complete these projects, Paragon and the owners of the
projects entered into a Settlement Agreement and Release of Claims. Subsequent
to and notwithstanding the terms of this settlement, issues arose regarding
responsibility for certain cost overruns that were incurred in connection with
the construction of the golf courses. Based upon an

                                       39
<PAGE>

13. RELATED PARTY TRANSACTIONS - (CONTINUED)

assessment of the potential risks and costs of litigation, the Company agreed to
a revised settlement pursuant to which Paragon agreed to pay the Developer
certain of the amounts at issue.

With regard to the California Project, Paragon issued to the Developer a
promissory note in the amount of $785,436 bearing interest at an annual rate of
10%, payable in quarterly installments of principal and interest over three
years. With regard to the Florida Project, Paragon issued to the Developer a
promissory note in the amount of $496,171 bearing interest at an annual rate of
10%, payable in quarterly installments of principal and interest over five
years. International guaranteed these notes. In connection with the settlement,
International agreed to credit any payments to which it would otherwise be
entitled to for the design services performed by Nicklaus Design at these two
projects, against the respective notes payable to be issued by Paragon to the
Developer. During 1999, Paragon paid $63,223 and $189,622 to the Developer
related to the Florida Project and California Project, respectively. During
1999, Paragon paid a total of $11,000 in interest pursuant to such obligations
due to International.

14. DISCONTINUED OPERATIONS

GOLDEN BEAR GOLF CENTERS

The Company sold the stock of its wholly-owned Golf Centers subsidiary on July
20, 1998. In connection with the sale, the Company entered into a licensing
agreement with the purchaser granting such purchaser the right to continue
operating the acquired golf centers under the GOLDEN BEAR GOLF CENTER brand
name. The Company retained its licensing and franchising rights with respect to
being able to offer franchise opportunities to outside parties for the operation
of golf instruction and practice facilities. In this regard, Golf Centers
distributed certain of its assets and liabilities to the Company prior to the
closing of the sale. All of the financial activities associated with the
operations that were sold have been classified as discontinued operations.

PARAGON CONSTRUCTION INTERNATIONAL, INC.

On October 26, 1998, the Company's Board of Directors approved the
discontinuance of the Company's golf course construction operations conducted by
its Paragon subsidiary. All such projects have been completed and the Company is
no longer actively involved in pursuing construction projects independent of its
agreement with Weitz Golf. See Note 13. Paragon had been involved in providing
comprehensive golf course and other resort-related construction services,
including project management, shaping, renovation and golf course construction.

The financial activities associated with Paragon have been classified as
discontinued operations in the accompanying Consolidated Financial Statements.
The results of operations attributable to Paragon are included in the
accompanying Consolidated Statements of Operations as a component of the line
item captioned, "Income (loss) from discontinued operations, net." The income
(loss) from such operations was $3,037,172, $(26,521,886) and $(17,326,058) for
the years ended December 31, 1999, 1998 and 1997, respectively. The net income
for the current year is primarily attributable to a favorable settlement with
regard to litigation involving the Company's insurance carrier that previously
provided certain construction related bonds for several of Paragon's
construction projects. In addition, the Company reached favorable settlements
with regard to its claims against certain project owners. In connection with a
settlement with Paragon's bonding company, Jack Nicklaus individually guaranteed
payment of a note payable which has a remaining balance of $850,000 as of
December 31, 1999.

                                       40
<PAGE>

14. DISCONTINUED OPERATIONS - (CONTINUED)

The components of the net liabilities associated with Paragon's discontinued
operations included in the accompanying Consolidated Balance Sheets consist of
the following:

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                         ----------------------------------
                                                              1999               1998
                                                         ---------------    ---------------
<S>                                                        <C>                <C>
      Current assets                                       $     60,844       $  1,932,478
      Property and equipment, net                               131,999          1,675,550
                                                         ---------------    ---------------
            Total assets                                        192,843          3,608,028
                                                         ---------------    ---------------
      Current liabilities                                     5,194,455         17,485,446
      Notes payable and capital leases                        4,870,499               ---
                                                         ---------------    ---------------
            Total liabilities                                10,064,954         17,485,446
                                                         ---------------    ---------------
            Net liabilities of discontinued operations     $  9,872,111       $ 13,877,418
                                                         ===============    ===============
</TABLE>

15. SEGMENT REPORTING

All of the Company's revenue generating activities are conducted by one
operating segment encompassing the licensing of NICKLAUS, JACK NICKLAUS and
GOLDEN BEAR branded products throughout the world, the operation of the NICKLAUS
FLICK GAME IMPROVEMENT and the generation of marketing fees related to Jack
Nicklaus' personal endorsements. As the Company operates and tracks its results
in one operating segment, certain segment disclosure requirements are not
applicable.

16.  INTERNATIONAL OPERATIONS

The Company derives a portion of its revenues from foreign sources, primarily
through the apparel licensing activities of its JNAI unconsolidated joint
venture and through certain of its golf centers licensing operations. Although
JNAI conducts its operations in the United States, substantially all of its
revenues are received from licensees located in the Asia Pacific region,
primarily Japan and Korea. All of the revenues of JNAI's licensees are generated
in foreign currencies. The licensees pay their license fees to JNAI denominated
in their respective functional currencies which are then converted to U.S.
dollars based on the exchange rate on the date of payment. Fluctuations in the
foreign currency values of these currencies relative to the U.S. dollar could
have a material adverse effect on the Company's future profitability.
Furthermore, the Company is engaged in significant business activities in Japan
and Asia. To the extent that markets in these geographic areas are volatile and
unfavorably impact the Company's customers, such events could have an adverse
effect on the Company's operations in the region going forward.

The Company has several licensees that operate golf center facilities under the
tradenames JACK NICKLAUS GOLF CENTER and JACK NICKLAUS ACADEMY OF GOLF that are
located in the Pacific Rim and Europe. Such licensees generally remit their
licensing fees, which are based on a percentage of their revenues, to the
Company denominated in their respective local currencies. Certain information
with respect to the Company's net investment in, and net equity in the earnings
of JNAI, along with the foreign operations of its golf centers licensing
activities is set forth below.

<TABLE>
<CAPTION>
                                                                   AS OF AND FOR THE YEARS ENDED DECEMBER 31,
                                                              ------------------------------------------------------
                                                                   1999               1998                1997
                                                              ---------------     --------------     ---------------
<S>                                                            <C>                 <C>                <C>
         Assets                                                $     541,019       $    411,870       $     289,496
                                                              ===============     ==============     ===============

         Revenues                                              $   1,183,308       $    832,647       $   1,080,892
                                                              ===============     ==============     ===============

         Contribution to operating income before
            Allocation of corporate overhead                   $   1,183,308       $    767,312       $   1,080,892
                                                              ===============     ==============     ===============
</TABLE>

                                       41
<PAGE>

17.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Summarized quarterly financial information for the years ended December 31, 1999
and 1998 is presented below.

<TABLE>
<CAPTION>
                                                                         QUARTER ENDED
                                            -------------------------------------------------------------------------
                                              MARCH 31,            JUNE 30,         SEPTEMBER 30,       DECEMBER 31,
                                                 1999                1999               1999               1999
                                            ---------------     ---------------    ---------------     --------------
<S>                                         <C>                  <C>                <C>                 <C>
Total revenues                              $  2,843,331         $   3,829,319      $   1,871,571       $  2,694,200

Operating income (loss)                         (519,089)              454,706           (293,887)           371,823

Income (loss) from continuing operations        (558,716)              439,728           (106,125)         4,844,195

Income (loss) from discontinued operations           ---               201,235            234,146          2,759,794

Net income (loss)                               (558,716)              640,963            128,021          7,603,989

Earnings per share - basic and diluted:
Income (loss) from continuing operations    $      (0.10)        $        0.08       $      (0.02)       $      0.88
Income (loss) from discontinued
operations                                           ---                  0.04               0.04               0.50
                                            --------------     ---------------    ---------------     --------------
Net income (loss) per share                 $      (0.10)        $        0.12       $       0.02        $      1.38
                                             ==============     ===============    ===============     ==============
</TABLE>

<TABLE>
<CAPTION>
                                                                          QUARTER ENDED
                                             ------------------------------------------------------------------------
                                               MARCH 31,           JUNE 30,         SEPTEMBER 30,       DECEMBER 31,
                                                 1998                1998               1998               1998
                                             --------------     ---------------    ---------------     --------------
<S>                                           <C>                <C>                <C>                 <C>
Total revenues                                $  2,981,085       $   3,290,741      $   2,457,879       $  2,655,335

Operating income (loss)                           (111,922)            572,718           (583,471)            72,682

Income (loss) from continuing operations          (301,556)            192,758           (829,160)           101,700

Loss from discontinued operations, net          (6,957,403)         (9,768,636)        (8,401,979)        (4,487,449)

Net (loss)                                      (7,258,959)         (9,575,878)        (9,231,139)        (4,385,749)

Earnings per share - basic and diluted:
Income (loss) from continuing operations      $      (0.06)      $        0.04     $        (0.15)      $       0.02
Loss from discontinued operations, net               (1.26)              (1.78)             (1.53)             (0.82)
                                             --------------     ---------------    ---------------     --------------
Net loss per share                            $      (1.32)      $       (1.74)    $        (1.68)      $      (0.80)
                                             ==============     ===============    ===============     ==============
</TABLE>

                                       42
<PAGE>

18. SUBSEQUENT EVENT

On March 28, 2000, the United States District Court approved the Settlement
Agreement related to the Company's shareholder lawsuits. See Note 12.

                                       43
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
None.

                                       44
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information as of March 22, 2000 with
respect to the directors and executive officers of the Company. A summary of the
background and experience of each of these individuals is set forth after the
table. The executive officers serve at the discretion of the Company's Board of
Directors.

<TABLE>
<CAPTION>
NAME                             AGE       POSITION WITH THE COMPANY
----                             ---       -------------------------
<S>                              <C>       <C>
Jack W. Nicklaus                 60        Chairman of the Board

Stephen S. Winslett              48        Senior Vice President, Chief Operating Officer and Chief Financial Officer

Roger E. Birk                    69        Director

Richard F. Chapdelaine           75        Director

John F. McGovern                 53        Director
</TABLE>

JACK W. NICKLAUS has served as Chairman of the Company's Board of Directors
since the Company's inception. Mr. Nicklaus founded International, a predecessor
of the Company, in 1970 and has served as Chairman of its Board since inception.
His competitive career has spanned five decades, and includes 100 professional
tournament victories worldwide and a record 20 major-championship titles. He is
the only player in history to have won each of the game's majors at least twice
(six Masters, five PGA Championships, four U.S. Opens, three British Opens and
two U.S. Amateurs). Mr. Nicklaus has twice been named Golfer of the Century, in
1988 by GOLF magazine and in 1996 by GOLF MONTHLY (UK). He was also named winner
of the PGA Tour Player of the Year Award, has been the Tour's leading
money-winner eight times and runner-up six times. He has played on six Ryder Cup
teams, captained two other Ryder Cup teams, and in December 1998 served as
captain of the U.S. team in the President's Cup. In addition, Mr. Nicklaus has
been involved in the design of 166 courses in 26 countries. He was named Golf
Course Architect of the Year in 1993 by GOLFWORLD magazine and four of his most
recent designs were ranked in GOLF DIGEST'S list of the Best New Courses in
1998.

STEPHEN S. WINSLETT joined the Company in October 1997 as Senior Vice President
and Chief Financial Officer. In October 1998, Mr. Winslett was also appointed
Chief Operating Officer of the Company after the resignation of the Company's
President and Chief Executive Officer. In this capacity, Mr. Winslett is
responsible for all of the operational activities and financial matters of the
Company. Prior to his employment with the Company, Mr. Winslett was Vice
President of Finance and Administration for the North American operations of The
Albert Fisher Group PLC, a multinational corporation listed on the London Stock
Exchange.

ROGER E. BIRK, a private investor, has served as a member of the Company's Board
of Directors since October 1996. Mr. Birk served as the President of the Federal
National Mortgage Association ("Fannie Mae") from 1987 to 1992 and is currently
one of its Board members. Prior to his tenure at Fannie Mae, Mr. Birk served as
Chairman and a member of the Board of the International Securities Clearing
Corporation. He also served as Chairman of the Board and Chief Executive Officer
of Merrill Lynch & Company, Inc. from 1981 to 1984 and was named Chairman
Emeritus in 1985. In addition to Fannie Mae, Mr. Birk currently serves on the
Board of Directors of Penske Corporation, Wellpoint Health Networks, Inc., and
is a life trustee of the University of Notre Dame.

RICHARD F. CHAPDELAINE has served as a member of the Company's Board of
Directors since October 1996. In 1966, Mr. Chapdelaine founded Chapdelaine &
Company, a New York-based securities firm where he currently serves as Chairman
of the Board. Mr. Chapdelaine is also Chairman of the Board of Chapdelaine
Corporate Securities & Company, serves on the Board of Directors of Long Island
Savings Bank and is a former Board member of St. Francis Hospital.

                                       45
<PAGE>

JOHN F. MCGOVERN has served as a member of the Company's Board of Directors
since October 1996. Mr. McGovern is currently a principal in Aurora Capitol, LLC
located in Atlanta, Georgia. Mr. McGovern also serves as member of the Board of
Directors of Hvide Marine Towing, a Ft. Lauderdale, Florida based company. Until
November 1999, Mr. McGovern served as the Executive Vice President of Finance
and Chief Financial Officer of Georgia-Pacific Corporation.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's
directors, executive officers and holders of in excess of 10% of the Company's
Class A Common Stock file initial reports of ownership and reports of changes in
ownership of the Company's Class A Common Stock and other equity securities with
the Securities and Exchange Commission and the NASDAQ Stock Market. Directors,
executive officers and greater than 10% shareholders are required to furnish the
Company with copies of all Section 16(a) forms that they file. Based upon a
review of the copies of such reports furnished to the Company and written
representations from the Company's directors and executive officers that no
other reports were required, the Company believes that during 1998, the
Company's directors, executive officers and greater than 10% shareholders
complied with all applicable Section 16(a) filing requirements, except as
follows. Mr. Nicklaus filed a report on Form 4 dated February 10, 1999 reporting
the purchase of 40,000 shares and 80,000 shares of the Company's Class A Common
Stock on October 30, 1998 and December 31, 1998, respectively, which shares had
previously been held by certain former executive officers of the Company.

                                       46
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information with respect to the annual
and long-term compensation paid or accrued by the Company during fiscal 1999,
1998 and 1997 to the Company's sole executive officer.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                   LONG-TERM
                                                                                 COMPENSATION
                                                     ANNUAL COMPENSATION             AWARDS
                                                  ---------------------------     -------------
                                                                                   SECURITIES         ALL OTHER
NAME AND                               YEAR         SALARY          BONUS          UNDERLYING        COMPENSATION
   PRINCIPAL POSITION                  (1)            ($)            ($)          OPTIONS (#)            ($)
---------------------------------     -------     ------------    -----------     -------------    -----------------
<S>                                    <C>           <C>             <C>                <C>               <C>
Stephen S. Winslett                    1999          230,000         100,000               ---              7,082
   Senior Vice President,              1998          200,000          30,000               ---              7,167
   Chief Operating Officer and         1997           38,889             ---            30,000             10,614
   Chief Financial Officer
</TABLE>

(1)  The amount presented for Mr. Winslett during 1997 includes $9,333
     representing reimbursement of moving expenses incurred in connection with
     his relocation to West Palm Beach, Florida.

(2)  Mr. Winslett's employment with the Company began on October 22, 1997 at an
     annual base salary of $200,000. Effective January 1, 1999, the Compensation
     Committee of the Company's Board of Directors authorized an increase in his
     annual base salary to $230,000. In addition, the compensation committee
     granted Mr. Winslett a discretionary bonus of $100,000 during 1999 in
     recognition of his expanded role as both the COO and CFO of the Company and
     for his contributions to the reorganization of the Company.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

There were no stock options granted to the named executive during fiscal 1999
under the Company's 1996 Stock Option Plan ("Option Plan").

FISCAL YEAR END OPTION VALUES

None of the stock options previously issued by the Company to the named
executive were exercised during fiscal 1999. At December 31, 1999, Mr. Winslett
had a total of 30,000 unexercised stock options, of which 20,000 options were
exercisable. None of the options held by Mr. Winslett were in-the-money at
December 31, 1999.

COMPENSATION OF DIRECTORS

Directors of the Company who are also employees of the Company do not receive
fees or retainers for serving as directors. Each non-employee director is
entitled to receive $20,000 per year for his services as a director plus
reimbursement of travel expenses to board and committee meetings. Each
non-employee director is also entitled to receive $1,000 per quarter for his
participation on the Audit Committee and Compensation Committee of the Company's
Board of Directors. Pursuant to the Option Plan, non-employee directors are
automatically granted non-qualified options each year to purchase 1,000 shares
of the Company's Class A Common Stock on the first business day following the
Company's annual meeting of shareholders. Such options are granted with an
exercise price equal to the fair market value of the stock on the date of grant
and have a term of ten years. No options were granted to non-employee directors
during 1999 because the Company did not hold an annual meeting of shareholders
during the year.

                                       47
<PAGE>

EMPLOYMENT AGREEMENTS

Upon the closing of the initial public offering of its Class A Common Stock, the
Company entered into an employment agreement, effective August 1, 1996, with Mr.
Nicklaus. The agreement provides for an annual base salary of $125,000, subject
to annual increases as determined by the Compensation Committee of the Company's
Board of Directors, which is comprised entirely of non-employee directors. Under
the terms of the agreement, the Company has agreed to employ Mr. Nicklaus for a
period of five years, which period is automatically extended for additional one
year periods until the employment agreement is terminated by the Company or Mr.
Nicklaus. In addition to the time associated with serving as the Chairman of the
Board of the Company, Mr. Nicklaus is required to spend a maximum of ten days
performing personal services or making appearances in connection with the
Company's licensing arrangements and marketing partnerships. Compensation for
any additional days in which Mr. Nicklaus agrees to provide such personal
services or appearances on behalf of the Company is to be mutually agreed upon
by the Company and Mr. Nicklaus on a case-by-case basis. In connection with
certain cost savings methods previously implemented by the Company Mr. Nicklaus
agreed to temporarily suspend payment of his base salary during 1999.

Under the terms of his employment agreement, Mr. Nicklaus is also entitled to
receive options to purchase 65,000 shares of Class A Common Stock each year, for
a period of four years, commencing on August 1, 1997. The options are
immediately exercisable upon grant, expire in 2006 and have a per share price
equal to the fair market value on the date of grant. In the event of Mr.
Nicklaus' death, Mr. Nicklaus' heirs will be entitled to continue to receive the
stock options which Mr. Nicklaus would have been entitled to receive under the
employment agreement. The options that Mr. Nicklaus was entitled to receive on
August 1, 1999 and 1998 were waived and deferred pending the resolution of
certain shareholder claims.

Mr. Winslett joined the Company on October 22, 1997 at an annual base salary of
$200,000, subject to annual increases as determined by the Compensation
Committee. In the event that his employment is terminated due to death,
disability or "wrongful termination," as defined, Mr. Winslett or his heirs will
be entitled to receive his annual base compensation and health insurance
benefits for himself and his family for a period of one year, together with a
pro-rata portion of the amount of any additional bonus compensation that he
would otherwise have been entitled to during the year of such termination. If a
wrongful termination occurs within one year of a "change of control," as
defined, the total compensation due, attributable to his base annual salary and
any additional bonus compensation, is payable in a lump sum within 30 days after
such termination, and Mr. Winslett will be entitled to receive health insurance
benefits for himself and his family for a period of one year.

In addition to the offices of Senior Vice President and Chief Financial Officer
of the Company previously held by Mr. Winslett, he was also appointed Chief
Operating Officer of the Company in October 1998, after the resignation of the
Company's President and Chief Executive Officer. Effective January 1, 1999, the
Compensation Committee authorized an increase in Mr. Winslett's annual base
salary to $230,000. The Company's employment arrangement with Mr. Winslett also
provides for the payment of annual performance-based additional bonus
compensation equal to a percentage of his base salary, based on the achievement
of certain pre-established performance objectives. During fiscal 1999, Mr.
Winslett received a $100,000 discretionary bonus approved by the Compensation
Committee. His employment arrangement also contains certain provisions with
respect to confidentiality and non-competition.

In addition the Company entered into an agreement to retain its former president
and chief executive officer as independent consultant to the Company effective
with his resignation on August 31, 1998. The terms of the consulting agreement
provide for an annual fee for $100,000, payable in semi-monthly installments
over the four year term. Pursuant to the agreement, during 1999 the Company paid
$100,000 to its former president.

                                       48
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Company's Class A Common Stock and Class B Common Stock as of
March 22, 2000 by (i) each person or entity who is the beneficial owner of five
percent or more of the outstanding shares of Class A Common Stock or Class B
Common Stock, (ii) each director and the named executive officer of the Company
and (iii) all directors and the executive officer of the Company as a group. The
business address of each five percent holder, director and the named executive
officer listed below is the Company's corporate address. As described in the
notes to the table, voting and/or investment power with respect to certain
shares of Class B Common Stock is shared by certain of the parties identified
below. Consequently, such shares may be shown as beneficially owned by more than
one person.

<TABLE>
<CAPTION>
                                                               AMOUNT AND NATURE OF
                                                               BENEFICIAL OWNERSHIP                  PERCENT OF
                                                     ------------------------------------------     TOTAL VOTING
                                                         NUMBER OF              NUMBER OF             POWER OF
                                                     SHARES OF CLASS A      SHARES OF CLASS B       OUTSTANDING
                                                        COMMON STOCK           COMMON STOCK            COMMON
BENEFICIAL OWNER                                           OWNED                 OWNED(2)             STOCK(1)
-------------------------------------------------    -------------------    -------------------    ---------------
<S>                                                             <C>                  <C>                    <C>
Jack W. Nicklaus(3)(5)                                          240,000              2,760,000              91.7%
Golden Bear International, Inc.(4)                                  ---              1,320,000              43.5%
Barbara B. Nicklaus and Northern Trust
   Bank of Florida, N.A., as co-trustees(5)                         ---                573,600              18.9%
Stephen S. Winslett                                                 ---                    ---                  *
Roger E. Birk                                                     7,500                    ---                  *
Richard F. Chapdelaine                                            3,150                    ---                  *
John F. McGovern                                                  3,000                    ---                  *
All directors and executive officers as
   a group (5 persons)(3)(5)                                    253,650              2,760,000              91.8%
</TABLE>
-------------------------------------------------
 *   Represents less than 1% of the total.

(1)  The calculation of the percent of total voting power of outstanding Common
     Stock is based on the respective number of shares of Class A Common Stock
     and Class B Common Stock outstanding as of March 22, 2000, at which date
     there were 2,744,962 shares of Class A Common Stock and 2,760,000 shares of
     Class B Common Stock outstanding. Each share of Class B Common Stock
     entitles the holder to ten votes.

(2)  The shares of Class B Common Stock are identical to the shares of Class A
     Common Stock in all respects, except for voting rights, certain conversion
     rights and transfer restrictions. While each share of Class A Common Stock
     entitles the holder to one vote on each matter submitted to a vote of the
     Company's shareholders, each share of Class B Common Stock entitles the
     holder to ten votes on each such matter, including the election of
     directors. Each share of Class B Common Stock is convertible at the option
     of the holder into one share of Class A Common Stock and is automatically
     converted into a share of Class A Common Stock upon the transfer to a
     person who is not a Nicklaus Family Member, as defined, or if the total
     number of shares of Class B Common Stock is less than 20% of the aggregate
     number of shares of Common Stock outstanding on the record date of any
     shareholders meeting.

(3)  Includes the 573,600 shares of Class B Common Stock held in family trusts
     for the benefit of Mr. Nicklaus' children and the 1,320,000 shares of Class
     B Common Stock owned of record by International. Mr. Nicklaus is the
     Chairman of the Board and the beneficial owner of the controlling interest
     in International and, accordingly, is deemed to beneficially own all such
     shares.

(4)  Mr. Nicklaus is the Chairman of the board and the beneficial owner of
     the controlling interest in International and, accordingly, is deemed
     to beneficially own all such shares.

(5)  All 573,600 shares of Class B Common Stock are held by Mrs. Nicklaus and
     Northern Trust Bank of Florida, N.A. as co-trustees of trusts for the
     benefit of Mr. and Mrs. Nicklaus' children. Mrs. Nicklaus and Northern
     Trust Bank of Florida, N.A. disclaim beneficial ownership of such shares.
     All of these shares are subject to a shareholders' agreement with Mr.
     Nicklaus which, among other things, grants to Mr. Nicklaus the right to
     vote all such shares and imposes certain limitations in the transfer of
     such shares. Certain of these shares are pledged to Mr. Nicklaus to secure
     loans made by Mr. Nicklaus to each of the trusts.

                                       49
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ARRANGEMENTS WITH INTERNATIONAL

The Company, International and Jack Nicklaus (collectively, the "Company
Affiliates") have an agreement with Weitz Golf International LLC ("Weitz Golf"),
pursuant to which the Company Affiliates provide certain technical and marketing
assistance in connection with the construction services offered by Weitz Golf,
which include general contracting, design-build and construction management.
Under the agreement, the Company no longer offers construction services
independently during the term of the agreement, which expires on December 31,
2007. The Company is entitled to receive 40% of the cumulative net profits, as
defined, received by Weitz Golf pursuant to the contracts it enters into during
the term of the agreement. There were no significant cumulative net profits from
the operations of Weitz Golf through December 31, 1999.

Pursuant to the terms of a personal services management agreement, International
and Jack Nicklaus have retained the Company as the exclusive manager and
representative to market the personal endorsement services of Mr. Nicklaus,
under which the Company is generally entitled to approximately 20% to 30% of the
personal endorsement fees received by Mr. Nicklaus. During fiscal 1999, the
Company earned management fees attributable to providing such services of
$217,550. At December 31, 1999, the Company had a net amount due from
International of $58,826, which was comprised primarily of the management fees
attributable to such personal endorsement services performed by Mr. Nicklaus.

The Company has an office staff sharing agreement with International that
provides for the sharing of the services of certain specifically identified
office staff and personnel that can effectively serve the needs of both
organizations. A total of $32,850 attributable to payroll and related costs
associated with such shared employees was allocated to International during
fiscal 1999.

Mr. Nicklaus provides services in various capacities to International and its
affiliates on an ongoing basis. During fiscal 1999, Mr. Nicklaus received a
salary from International for services rendered to International and its
affiliates.

On April 15, 1999, the Company entered into a settlement agreement with a former
customer of Paragon. Paragon had been engaged by this customer (the "Developer")
to construct a golf course located in San Jose, California ("California
Project") and one located in Orlando, Florida ("Florida Project"). Nicklaus
Design, a division of International, designed both of the golf course projects.
In addition, the Florida Project is owned by a partnership controlled by the
Developer in which International has a 25% limited partner interest. After
Paragon was unable to complete these projects, Paragon and the owners of the
projects entered into a Settlement Agreement and Release of Claims. Subsequent
to and notwithstanding the terms of this settlement, issues arose regarding
responsibility for certain cost overruns that were incurred in connection with
the construction of the golf courses. Based upon an assessment of the potential
risks and costs of litigation, the Company agreed to a revised settlement
pursuant to which Paragon agreed to pay the Developer certain of the amounts at
issue.

With regard to the California Project, Paragon issued to the Developer a
promissory note in the amount of $785,436 bearing interest at an annual rate of
10%, payable in quarterly installments of principal and interest over three
years. With regard to the Florida Project, Paragon issued to the Developer a
promissory note in the amount of $496,171 bearing interest at an annual rate of
10%, payable in quarterly installments of principal and interest over five
years. International guaranteed these notes. In connection with the settlement,
International agreed to credit any payments to which it would otherwise be
entitled to for the design services performed by Nicklaus Design at these two
projects, against the respective notes payable to be issued by Paragon to the
Developer. During 1999, Paragon paid $63,223 and $189,622 to the Developer.
During 1999, Paragon paid a total of $11,000 in interest pursuant to such
obligations due to International.

NICKLAUS GOLF EQUIPMENT COMPANY, L.C.

In the ordinary course of business, the Company purchases golf equipment
manufactured by Nicklaus Golf Equipment Company, L.C., a privately owned company
in which Jack Nicklaus has a 50% equity interest. Such

                                       50
<PAGE>

equipment is purchased primarily for promotional programs associated with the
Company's NICKLAUS FLICK GAME IMPROVEMENT. During fiscal 1999, the Company
purchased such golf equipment at an aggregate cost of $21,312.

EXECUTIVE SPORTS INTERNATIONAL

During the years ended December 31, 1999, 1998 and 1997, the Company procured
certain printing and graphic services totaling $90,647, $93,243 and $125,101,
respectively, from Executive Sports International ("ESI"), a privately held
company owned in part by a member of the Nicklaus family. In 1999, the Company
entered into a marketing and support agreement with ESI in connection with the
promotion, marketing, sale and operation of NICKLAUS FLICK GAME IMPROVEMENT'S
Executive Golf Programs and other group golf school and clinic programs. Under
the marketing and support agreement, ESI earned a management fee of $87,000,
commissions of $90,925 and was reimbursed for student travel and amenities of
$49,000 during 1999.

                                       51
<PAGE>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  (1)  Financial Statements of the Company are set forth in Part II, Item 8
          of this report.

     (2)  Financial Statement Schedule II, Valuation and Qualifying Accounts for
          the Years Ended December 31, 1999, 1998 and 1997 is submitted herein.

     (3)  Separate Financial Statements of Subsidiary Not Consolidated - Jack
          Nicklaus Apparel International, as of and for the Year Ended November
          30, 1999.

     (4)  Exhibits are set forth in the Index to Exhibits included elsewhere
          herein.

(b)  Reports on Form 8-K

     There were no reports on Form 8-K filed during the fourth quarter of the
     fiscal year ended December 31, 1999.

(c)  Exhibits

     See (a) (4) above.

(d)  Financial Statement Schedules

     See (a) (2) above.

                                       52
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 24, 2000.

                       GOLDEN BEAR GOLF, INC.


                       By:   /S/  STEPHEN S. WINSLETT
                             --------------------------------------------------
                             Stephen S. Winslett
                             Senior Vice President, Chief Operating Officer and
                             Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on March 30, 2000.

           SIGNATURE                                   TITLE

/S/  JACK W. NICKLAUS
------------------------------
Jack W. Nicklaus                    Director and Chairman of the Board


/S/  STEPHEN S. WINSLETT
------------------------------
Stephen S. Winslett                 Senior Vice President, Chief Operating
                                    Officer, Chief Financial Officer
                                    (Principal Executive, Financial and
                                    Accounting Officer)

/S/  ROGER E. BIRK
------------------------------
Roger E. Birk                       Director


/S/  RICHARD F. CHAPDELAINE
------------------------------
Richard F. Chapdelaine              Director


/S/  JOHN F. MCGOVERN
------------------------------
John F. McGovern                    Director

                                       53
<PAGE>


                             GOLDEN BEAR GOLF, INC.

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                                     ADDITIONS           DEDUCTIONS
                                                                   ---------------     ---------------
                                                  BALANCE AT         CHARGED TO                             BALANCE AT
                                                  BEGINNING          COSTS AND            AMOUNTS              END
                DESCRIPTION                        OF YEAR            EXPENSES          WRITTEN OFF          OF YEAR
--------------------------------------------    ---------------    ---------------     ---------------    ---------------
<S>                                              <C>                <C>                 <C>                <C>
YEAR ENDED DECEMBER 31, 1997:
   Allowance for uncollectible accounts          $     151,563      $      80,250       $     179,313      $      52,500
   Valuation allowance for deferred
      Tax assets                                       539,000          8,880,116                 ---          9,419,116

YEAR ENDED DECEMBER 31, 1998:
   Allowance for uncollectible accounts          $      52,500      $     384,995       $     156,807      $     280,688
   Valuation allowance for deferred
      Tax assets                                     9,419,116          8,074,507                 ---         17,493,623

YEAR ENDED DECEMBER 31, 1999:
   Allowance for uncollectible accounts          $     280,688      $     109,835       $     194,775      $     195,748
   Valuation allowance for deferred
      Tax assets                                    17,493,623           2,894,959                ---         20,388,582
</TABLE>

                                       54
<PAGE>

                        SEPARATE FINANCIAL STATEMENTS OF
                           SUBSIDIARY NOT CONSOLIDATED




                       JACK NICKLAUS APPAREL INTERNATIONAL

                              FINANCIAL STATEMENTS


                                  TOGETHER WITH

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                                NOVEMBER 30, 1999




                                       55
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Joint Venture Partners of Jack Nicklaus Apparel International:

We have audited the accompanying balance sheet of Jack Nicklaus Apparel
International as of November 30, 1999 and the related statements of operations,
partners' equity and cash flows for the fiscal year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Jack Nicklaus Apparel
International as of November 30, 1999 and the results of its operations and its
cash flows for the fiscal year then ended, in conformity with accepted
accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

West Palm Beach, Florida,
   March 28, 2000.

                                       56
<PAGE>

                       JACK NICKLAUS APPAREL INTERNATIONAL

                                  BALANCE SHEET

                            AS OF NOVEMBER 30, 1999

                                     ASSETS
CURRENT ASSETS:
   Cash                                                   $        100,400
   Accounts receivable                                            1,438,141
                                                          -----------------
           Total current assets                                   1,538,541

INVESTMENT IN AFFILIATED COMPANY                                     49,863
                                                          -----------------

           Total assets                                    $      1,588,404
                                                          =================

                        LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                        $         42,462
   Accrued commissions                                              232,078
   Accrued income taxes                                             188,119
   Accrued liabilities                                               44,166
   Deferred revenue                                                  13,627
                                                          -----------------

           Total current liabilities                                520,452

COMMITMENTS AND CONTINGENCIES (Note 4)

PARTNERS' EQUITY                                                  1,067,952
                                                          -----------------

           Total liabilities and partners' equity          $      1,588,404
                                                          =================

            The accompanying notes to the financial statements are an integral
part of this statement.

                                       57
<PAGE>

                       JACK NICKLAUS APPAREL INTERNATIONAL

                             STATEMENT OF OPERATIONS

                      FOR THE YEAR ENDED NOVEMBER 30, 1999


REVENUES                                                 $        2,644,833

OPERATING EXPENSES                                                  404,448
                                                         -------------------

       Income before provision for income taxes                   2,240,385

PROVISION FOR INCOME TAXES                                          337,601
                                                         -------------------

       Net income                                        $        1,902,784
                                                         ===================

            The accompanying notes to the financial statements are an integral
part of this statement.

                                       58
<PAGE>

                       JACK NICKLAUS APPAREL INTERNATIONAL

                          STATEMENT OF PARTNERS' EQUITY

                      FOR THE YEAR ENDED NOVEMBER 30, 1999


BALANCE, November 30, 1998                        $    714,288

Net income                                           1,902,784

Distributions to partners                           (1,549,120)
                                                 --------------

BALANCE, November 30, 1999                        $  1,067,952
                                                 ==============


            The accompanying notes to the financial statements are an integral
part of this statement.

                                       59
<PAGE>

                       JACK NICKLAUS APPAREL INTERNATIONAL

                             STATEMENT OF CASH FLOWS

                      FOR THE YEAR ENDED NOVEMBER 30, 1999
<TABLE>
<S>                                                                                               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                                     $    1,902,784
      Changes in assets and liabilities:
         Accounts receivable                                                                            (656,142)
         Accounts payable                                                                                 (2,867)
         Accrued commissions                                                                              75,123
         Accrued income taxes                                                                            127,602
         Accrued liabilities                                                                              44,166
         Deferred revenue                                                                                 13,627
                                                                                                 -------------------
           Net cash provided by operating activities                                                    1,504,293

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions to partners                                                                           (1,549,120)
                                                                                                 -------------------
           Net decrease in cash                                                                           (44,827)
CASH, beginning of year                                                                                   145,227
                                                                                                 -------------------
CASH, end of year                                                                                 $       100,400
                                                                                                 ===================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid for interest                                                                      $           ---
                                                                                                 ===================

      Cash paid for income taxes                                                                  $       257,041
                                                                                                 ===================
</TABLE>
            The accompanying notes to the financial statements are an integral
part of this statement.

                                       60
<PAGE>

                       JACK NICKLAUS APPAREL INTERNATIONAL

                          NOTES TO FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

Jack Nicklaus Apparel International ("JNAI") is a joint venture between Golden
Bear Apparel International, Inc. and another company. The joint venture was
formed on March 29, 1983 for the purpose of securing licensees and entering into
license agreements for the use of the name and likeness of Jack Nicklaus,
including the facsimile signature of JACK NICKLAUS and the GOLDEN BEAR
trademarks in connection with the manufacture, advertisement, promotion and sale
of wearing apparel and other products throughout the world, except the United
States, Mexico and Puerto Rico. JNAI licenses the JACK NICKLAUS and GOLDEN BEAR
trademarks under a sublicense agreement with Golden Bear Golf, Inc., which owns
all of the issued and outstanding capital stock of Golden Bear Apparel
International, Inc.

The joint venture agreement provides that any capital contributions required by
JNAI be made in equal amounts by each of its two partners. Additionally,
substantially all items of net income earned or net losses incurred by JNAI are
allocated to its two partners in equal shares. JNAI may set aside reasonable
cash reserves for working capital purposes and for the payment of the expenses
of the venture along with other obligations and contingencies. However, all
remaining funds of JNAI are required to be distributed at least annually to the
partners. Neither partner of JNAI may assign or otherwise transfer any of its
interest in JNAI without the consent of the other partner.

The joint venture agreement provides that JNAI shall continue until December 31,
2000, unless otherwise terminated prior to that date by the mutual consent of
both partners or by operation of law. However, the termination date set forth in
the joint venture agreement can be extended by mutual consent of both partners.
As of March 28, 2000, the joint venture agreement has not been extended beyond
December 31, 2000. Upon termination of JNAI, its net remaining assets are to be
distributed to its two partners in the manner set forth in the joint venture
agreement, which generally provides for distributions of equal amounts.

Although JNAI conducts its operations in the United States, substantially all of
its revenues are received from licensees located in the Asia Pacific region,
primarily Japan and Korea. All of the revenues of JNAI's licensees are generated
in foreign currencies. The licensees pay their license fees to JNAI denominated
in their respective functional currencies which are then converted to U.S.
dollars based on the exchange rate on the date of payment. Although foreign
currency fluctuations have not been significant historically, fluctuations in
the values of these currencies relative to the U.S. dollar could have a material
adverse effect on JNAI's future profitability. To the extent that the Asia
Pacific markets are volatile and unfavorably impact JNAI's customers, such
events could have an adverse effect on JNAI's operations in future periods.

CASH

Cash is comprised of funds on deposit in a non-interest bearing checking
account.

ACCOUNTS RECEIVABLE AND REVENUE RECOGNITION

Revenues are recognized based on the licensing agreements with licensees, which
generally provide that JNAI is entitled to a percentage of the sales of
qualifying apparel and other products as reported by the licensees. JNAI
collects its licensing fees from customers based on various predetermined
intervals of time throughout its fiscal year, as set forth in the respective
agreements with its licensees.

                                       61
<PAGE>

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (CONTINUED)

CONCENTRATION OF CREDIT RISK

JNAI's credit risks consist primarily of accounts receivable with its two
primary licensees, JNJ, Inc.("JNJ")and Kolon, Inc ("Kolon"). The Company
performs periodic credit evaluations of its customers' financial condition and
provides allowances for doubtful accounts as required based upon factors
surrounding the credit risk of specific customers, historical trends and other
information. JNJ and Kolon represented $1.3 million and $1.1 million,
respectively, of JNAI's revenues for the fiscal year ended November 30, 1999.
Amounts due from JNJ and Kolon, totaled $0.7 million and $0.7 million,
respectively, as of November 30, 1999.

ACCRUED COMMISSIONS

Accrued commissions are payable to an officer of JNAI in lieu of fixed
compensation for certain marketing and other promotional services performed on
behalf of JNAI. Such commissions are based on 33.3% of operating profits as
defined.

INCOME TAXES

For Federal income tax purposes, JNAI is treated as a partnership and
accordingly, the components of its taxable income or loss are allocated to the
two partners in accordance with the joint venture agreement, which generally
provides that such items are to be allocated in equal amounts to each partner.
As such, JNAI as an entity is not subject to Federal income taxes. However,
JNAI's licensees typically deduct amounts attributable to foreign income taxes
payable to their respective foreign taxing authorities from the licensing fees
otherwise due to JNAI. The partners of JNAI receive a pro-rata credit for such
foreign taxes paid against their taxable income for U.S. Federal income tax
purposes.

USE OF ESTIMATES

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

FOREIGN EXCHANGE INSTRUMENTS

JNAI is exposed to the impact of foreign currency fluctuations. Such exposure to
market risk is inherent in certain of JNAI's financial instruments which arise
from transactions entered into in the normal course of business. JNAI has
significant operations in Asia and as a result, its financial performance could
be affected by significant fluctuations in foreign exchange rates. To mitigate
potential adverse trends, JNAI has historically entered into various hedging
contracts to protect the value of its earned royalty payments denominated in
Japanese Yen. JNAI's policy is to enter into such foreign currency hedging
transactions only to the extent considered necessary to protect the values of
such royalties. JNAI does not enter into foreign currency transactions for
speculative purposes.

The Company's accounting policies for these instruments are based on the
Company's designation of such instruments as hedging transactions. The criteria
the Company uses for designating an instrument as a hedge include the
instrument's effectiveness in risk reduction and one-to-one matching of
derivative instruments to underlying transactions. Gains and losses on currency
forward contracts that are designated and effective as hedges of anticipated
transactions, for which a firm commitment has been attained, are deferred and
recognized in income in the same period that the underlying transactions are
settled. Gains and losses on currency forward contracts that are designated and
effective as hedges of existing transactions are recognized in income in the
same period as losses and gains on the underlying transactions are recognized
and generally offset. Gains and losses on any instruments not meeting the above
criteria would be recognized in income in the applicable period.

                                       62
<PAGE>

In November 1999, the partners of JNAI, entered into currency forward contracts
on behalf of JNAI. The notional amounts were $433,541 maturing in January 2000
and $295,626 maturing in February 2000. In December 1999, the partners of JNAI
entered into currency forward contracts in amounts of $465,224 and $332,683
maturing in July 2000 and August 2000, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosure of the fair value of
certain financial instruments. Cash, accounts receivable, accounts payable and
accrued liabilities are stated at cost which approximates fair value.

ACCOUNTING PRONOUNCEMENT

Comprehensive income is defined as the change in equity during the financial
reporting period of a business enterprise resulting from non-owner sources.
During the year ended November 30, 1999, the Company did not have any changes in
its equity resulting from such non-owner sources. Accordingly, comprehensive
income as set forth by SFAS No. 130 was equal to the net income (loss) amounts
presented for the accompanying Statement of Operations.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or a liability measured at its
fair value. SFAS 133 requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. In June 1999, the FASB issued Statement of Financial Accounting Standards
No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the effective date of FASB Statement No. 133." SFAS 137 deferred the
effective date of SFAS 133 to fiscal years beginning after June 15, 2000.
Management believes the impact of adopting this statement will not have a
material impact upon the Company's results of operations of financial position.

2.  INVESTMENT IN AFFILIATED COMPANY

JNAI has a 30% equity interest in certain operations of JNJ, Inc. ("JNJ"), which
receives specific royalties from other licensees of JNAI in exchange for
providing certain marketing and advertising services. JNAI's net equity earnings
in the operations of JNJ for the fiscal year ended November 30, 1999 were not
material to the results of its operations.

3.  RELATED PARTY TRANSACTIONS

Certain administrative functions are performed for JNAI by its partners for
which no amounts are charged to JNAI. Additionally, certain administrative
expenses of JNAI are paid directly by the partners. Management does not believe
the costs related to the administrative functions or administrative expenses are
material to the financial position or results of operations of JNAI.

4.  COMMITMENTS AND CONTINGENCIES

In the normal course of business, the nature of JNAI's operations may result in
claims for damages. In the opinion of management, there are no pending legal
proceedings that would have a material effect on JNAI's financial position or
results of operations.

                                       63
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
  EXHIBIT
   NUMBER                                              DESCRIPTION OF EXHIBITS
  -------                                              -----------------------

       <S>       <C>                                                                                   <C>
       2         Agreement and Plan of Reorganization  (incorporated by reference to Exhibit 2.1 to the Registrant's
                 Registration Statement on Form S-1, Commission File No. 0-21089).

      3.1        Articles of  Incorporation  of the  Registrant  (incorporated  by  reference  to Exhibit 3.1 to the
                 Registrant's Registration Statement on Form S-1, Commission File No. 0-21089).

      3.2        Bylaws  of  the  Registrant   (incorporated  by  reference  to  Exhibit  3.3  to  the  Registrant's
                 Registration Statement on Form S-1, Commission File No. 0-21089).

      4          Form of  Class A  Common  Stock  Certificate  (incorporated  by  reference  to  Exhibit  4.1 to the
                 Registrant's Registration Statement on Form S-1, Commission File No. 0-21089).

     10.1        Form  of  Registration  Rights  Agreement  (incorporated  by  reference  to  Exhibit  10.1  to  the
                 Registrant's Registration Statement on Form S-1, Commission File No. 0-21089).

     10.2        The Golden Bear Golf,  Inc.  1996 Stock Option Plan  (incorporated  by reference to Exhibit 10.2 to
                 the Registrant's Registration Statement on Form S-1, Commission File No. 0-21089).

     10.3        Independent Marketing and Support Agreement,  dated January 1, 1999, between Golden Bear Golf, Inc.
                 and Executive Sports International, Ltd.

     10.4        Loan  Agreement,  dated July 13,  1998,  between  Golden  Bear  Golf,  Inc.  and Jack W.  Nicklaus.
                 (incorporated by reference to Exhibit 10.5 to the  Registrant's  Annual Report on Form 10-K for the
                 fiscal year ended December 31, 1998).

     10.5        Promissory  Note in the amount of $2.4  million,  dated July 13, 1998,  issued by Golden Bear Golf,
                 Inc. to Jack W. Nicklaus c/o Golden Bear International,  Inc. (incorporated by reference to Exhibit
                 10.6 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).

     10.6        Form of  Indemnification  Agreement  between  Golden Bear Golf,  Inc. and each of its Directors and
                 Executive  Officers  (incorporated  by reference to Exhibit 10.7 to the  Registrant's  Registration
                 Statement on Form S-1, Commission File No. 0-21089).

     10.7        Amended  and  Restated  Joint  Venture  Agreement,  dated  June 1,  1994 of Jack  Nicklaus  Apparel
                 International,  a joint venture between  Seaford  Clothing  Company and Golden Bear  International,
                 Inc. (incorporated by reference to Exhibit 10.8 to the Registrant's  Registration Statement on Form
                 S-1, Commission File No. 0-21089).

     10.8        Master Apparel Agreement, dated June 1, 1993, by and between Golden Bear International,  Inc., Hart
                 Schaffner  & Marx and  Hartmarx  Corporation  (incorporated  by  reference  to Exhibit  10.9 to the
                 Registrant's Registration Statement on Form S-1, Commission File No. 0-21089).

     10.9        Trademark  License  Agreement,  dated June 7, 1996,  between  Golden Bear  International,  Inc. and
                 Golden Bear Golf,  Inc.  (incorporated  by reference to Exhibit  10.10 to the  Registrant's  Annual
                 Report on Form 10-K for the fiscal year ended December 31, 1996).

     10.10       Stock Purchase Agreement between Family Golf Centers,  Inc. and Golden Bear Golf, Inc., dated as
</TABLE>

<PAGE>

<TABLE>
     <S>         <C>

                 of June 16, 1998 (incorporated by reference to Exhibit 2.1 to the Registrant's  Current Report on Form
                 8-K, dated July 20, 1998).

     10.11       Licensing Agreement between Family Golf Centers,  Inc. and Golden Bear Golf, Inc., dated as of July
                 20, 1998 (incorporated by reference to Exhibit 2.2 to the Registrant's  Current Report on Form 8-K,
                 dated July 20, 1998).

     10.12       Referral,  Participation  and  Noncompete  Agreement,  dated  December 18, 1998,  by and among Jack
                 Nicklaus,  Golden Bear  International,  Inc.,  Golden Bear Golf, Inc., The Weitz Company,  Inc. and
                 Weitz Golf  International,  LLC.  (incorporated  by reference to Exhibit 10.13 to the  Registrant's
                 Annual Report on Form 10-K for the fiscal year ended December 31, 1998).

     10.13       Office  Staff  and  Equipment  Service   Agreement,   dated  June  7,  1996,  between  Golden  Bear
                 International,  Inc. and Golden Bear Golf, Inc.  (incorporated by reference to Exhibit 10.14 to the
                 Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996).

     10.14       Personal Services Management Agreement,  dated June 7, 1996, between Golden Bear Golf, Inc., Golden
                 Bear  International,  Inc. and Jack W. Nicklaus  (incorporated by reference to Exhibit 10.12 to the
                 Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996).

     10.15       Shareholders' Agreement, dated July 15, 1996, among Nicklaus
                 Family Members and Golden Bear Golf, Inc. (incorporated by
                 reference to Exhibit 10.20 to the Registrant's Annual Report on
                 Form 10-K for the fiscal year ended December 31, 1996).

     21          Subsidiaries of the Registrant.

     23          Consent of Arthur Andersen LLP.

     27          Financial Data Schedule (for SEC use only).
</TABLE>